The Most Important Number of the Week Was 1
U.S. Treasury yields above 1% can’t slow a stock rally buoyed by all the free cash flooding into the country.
One is the trickiest number.
Photographer: Don Emmert/AFP/Getty Images
Meet the new year, same as the old year. The stock market started 2021 just as it ended 2020, which is to say it staged an impressive rally in the first week in the face of what would otherwise be some obvious headwinds. So despite extremists storming the U.S. Capitol in a bid to overturn President-elect Joe Biden’s victory, talk of invoking the 25th Amendment to remove Donald Trump from office and a monthly employment report that showed the economy lost 140,000 jobs in December, the S&P 500 Index surged 1.83%, setting yet another record high on Friday.
But to close market watchers, perhaps what was most impressive is that equities overcame 1% bond yields. The yield on the benchmark 10-year Treasury note, which helps determine borrowing costs for the government, companies and even individuals, rose above that psychologically important level on Wednesday for the first time since March before ending the week at 1.12%. An argument could be made that yields well below 1% were a primary reason stocks soared last year even with a global pandemic and the worst recession since the Great Depression.