Stocks are climbing today on stimulus optimism after Treasury Secretary Yellen signaled support for President Biden's $1.9 trillion pandemic stimulus plan by saying on Sunday that the U.S. can return to full employment in 2022 if Congress enacts a robust enough pandemic relief package. Stocks are seeing support from the decline in new Covid infections, which may end lockdowns and bolster the recovery. The number of new U.S. Covid infections on Sunday fell to a 3-month low of 89,791. A rally in other global equity markets today is providing carry-over support for U.S. stock indexes. Europe's Euro Stoxx 50 Index climbed to an 11-1/2 month high today on comments from ECB President Lagarde, who said the Eurozone recovery "has been delayed, but not derailed" and that the economy would pick up in the summer as the pace of Covid vaccinations is accelerated. Also, a rally in Japanese stocks was positive for global equity markets after Japan's Nikkei Stock index soared today to a new 30-year high. An easing of the Covid pandemic in the U.S., along with optimism for additional pandemic stimulus, is boosting airline stocks today with United Airlines and Delta Air Lines up more than +4%. Also, strength in energy stocks is lifting the overall market today with Occidental Petroleum up more than +10% and Marathon Oil up more than +8% after crude oil prices climbed to a new 1-year high today. Stocks continue to be undercut by the ongoing pandemic, which is undercutting economic growth and corporate profits. Globally, Covid infections have risen above 106.759 million, and deaths have exceeded 2.328 million. A surge in inflation expectations may lead to tighter Fed policy and is a negative factor for stocks. The 10-year T-note breakeven inflation expectations rate soared to a 6-1/2 year high today of 2.216%, well above the Fed's 2% inflation target. The VIX S&P 500 Volatility Index ($VIX) this morning is up +0.79 at 21.66, rebounding slightly from Friday's 1-3/4 month low of 20.86. The VIX is down sharply from last March's 12-1/4 year high of 85.47 and is just above the late-November 11-1/2 month low of 19.51. Via Barchart.com
