Wall Street shares fell on reports that US President Joe Biden was planning to raise capital gains tax for high net worth individuals.
The S&P 500 Index abandoned morning gains to slide 1.1% in the afternoon in New York after a Bloomberg Report stating that people earning more than $ 1 million would pay a capital gains rate of 39.6%, compared to 20 percent. The high tech Nasdaq Composite followed the blue chip benchmark lower, falling 1.1%.
The 10-year US Treasury yield fell 0.01 percentage point to 1.56% after unemployment data showed the number of new claimants in the United States fell to an all-time low era of the pandemic last week.
During the morning session on Wall Street, stocks hovered between small gains and losses as investors increasingly wary of a stock rally that began in November following positive vaccine announcements. .
“The American markets can still perform well,” said Pascal Blanqué, investment director at fund manager Amundi, while warning against the need to avoid “any excess euphoria that accumulates”.
“There is not a huge advantage” on the American markets, added Stéphane Monier, investment director of the private bank Lombard Odier. Investors were waiting for a market correction before adding positions again. “We do not know what could trigger another stage,” he added.
Across the Atlantic, stocks rose for a second session, with the pan-regional Stoxx Europe 600 index closing 0.7% higher. In the UK, London’s FTSE 100 added 0.6%, while the FTSE 250, its mid-cap counterpart, climbed 1.3% for its best daily performance since early March.
The Stoxx 600 is trading at 18 times expected earnings, compared to 23 times for the S&P 500, as Europe lags the United States in rolling out coronavirus vaccinations. Azad Zangana, senior European economist and strategist at Schroders, said that meant the markets had more of a recovery trend to look forward to in Europe.
“American assets are incredibly expensive now compared to their own history and to the rest of the world, so it’s very easy to find good arguments to underweight the United States and overweight Europe,” he said. declared.
The 10-year German Bund yield was little changed to minus 0.26% after a European Central Bank meeting that reported no change in its commitment to buy large quantities of bonds issued by the nations of the bloc.
Global benchmark Brent crude fell 0.2% to $ 65.19 a barrel after India, one of the world’s largest oil importers, reported a record 315,000 new daily infections, surpassing the US peak reached earlier this year.