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Stocks Edge Up as Biden Spending Plan Boosts U.S. Outlook

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Stocks crept higher on Thursday following their weakest quarter in a year, while higher Treasury yields supported the dollar, as investors parsed the details of a 2 trillion U.S. government spending plan and hoped for strong jobs data later in the week.

MSCIs broadest index of AsiaPacific shares outside Japan rose 0.6 after a modest drop on Wednesday. Japans Nikkei rose 1.3 as a survey showed big manufacturers mood bouncing back to prepandemic levels.

Tenyear U.S. Treasuries, which had suffered their biggest selloff in a dozen years last quarter, remained under pressure and yields crept as high as 1.753, while the dollar stood just shy of a oneyear peak on the yen at 110.685.

On the heels of a 1.9 trillion pandemic relief package, President Joe Biden on Wednesday outlined a broad plan to remake the worlds biggest economy including spending on roads, railways, broadband, clean energy and semiconductor manufacture.

Well probably see more spending power from the stimulus than drag from the accompanying taxes, said Jun Bei Liu, portfolio manager at Tribeca Investment Partners in Sydney.

And if anything the higher taxes probably limit future inflationary pressure, and in a strange way might even help bond yields to stabilise where they are.

It is not clear if the plan could clear Congress, since it has had an icy reception from Republicans, however, the breadth of the proposed spending did help draw investors back to technology shares overnight, and the Nasdaq rose 1.5….

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