Stock market optimism among Wall Street strategists has risen close to levels that signalled trouble for equities in the past. A Bank of America measure of their bullishness is near a level that historically has been bearish for stocks.

The gauge assesses the average recommended allocation to equities by sell-side strategists and is very close to triggering a sell signal, a team including Savita Subramanian wrote Monday.  Last week’s worries about the impact of higher bond yields on stocks evaporated Monday, with US equities notching their biggest advance since June.

“The last time the indicator was this close to ‘Sell’ was June 2007 after which we generally saw 12-month returns of minus 13%,” the strategists said, adding even current levels signal below-average equity returns over the next year. “We‘ve found Wall Street bullishness to be a reliable contrarian indicator.” (BBG - Continue Reading)

The US Senate will start debating President Joe Biden’s $1.9 trillion coronavirus relief bill this week, Senate Majority Leader Chuck Schumer said on Monday after Democrats backed down from an effort to raise the minimum wage to $15 as part of it.

The backpedalling did not end hopes of addressing the minimum wage issue in Congress. Democrats and some Republicans have voiced support for the idea of raising the federal minimum wage, now at $7.25 an hour, for the first time since 2009, although they disagree on how much.

Republican Senators Mitt Romney and Tom Cotton last week proposed an increase to $10 per hour but said employers should verify the wage is going to workers who are legally in the United States. (RTRS - Continue Reading)

Eurozone consumer price growth is expected to show a slight increase in February, a scenario likely to further fuel inflation concerns about the impact of government and central bank promises of trillions in fiscal and monetary stimuli in Europe and beyond.

The flash reading for headline inflation in the Eurozone is expected grow to 1.0% in February after surging to 0.9% in January from -0.3% in the final month of 2020. Core preliminary inflation is projected to ease to 1.1% for February after jumping to a five-year high of 1.4% at the start of the year from a record low of -0.2% in December, its biggest move ever.

The return of the main inflation measure to positive territory after five months in the red followed sharp rises in food, alcohol, tobacco, and services, with one-offs contributing to the surprisingly strong increase. (LiveSquawk - Continue Reading)