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Oil futures reach 13-month high as global stocks advance with U.S. markets shut

By Steve Goldstein

Vivendi surges on plan to spin Universal Music Group into separately listed company

The rally in commodities that some say is the start of a supercycle continued on Monday, buoying resource stocks.

The West Texas Intermediate contract , the leading benchmark for oil in the U.S., topped $60 a barrel for the first time since Jan. 2020. Middle East tensions and an unusual cold snap in Texas that could cause supply disruptions (link)was credited with moving prices higher. Other commodities including platinum also advanced.

"The robust recovery in oil prices and industrial metals over the past couple of months is driving the idea of a new commodities supercycle in which prices remain above-trend for many years to come," said Hussein Sayed, chief market strategist at FXTM.

Also read: The fifth commodity supercycle has started, says leading JPMorgan analyst (link)

Up 12 of the last 15 weeks, the Stoxx Europe 600 rose 1.1% with gainers including miners Rio Tinto and BHP Group, and oil producer Total .

The Nikkei 225 rose 1.9% in Tokyo to a fresh 30-year high, and the Kospi Composite rose 1.5% in Seoul. The U.S. market is shut for the Presidents Day holiday (link), and markets in Hong Kong and China are closed for Lunar New Year. U.S. stock futures , which are trading electronically, advanced.

The rollout of vaccines and progress on the Biden administration's proposed $1.9 trillion stimulus is helping to fuel moves in global asset markets this year, the so-called reflation trade. Last week, the yield on the 10-year Treasury topped 1.20% for the first time in a year.

Vivendi shares traded 20% higher in Paris after it said it would distribute 60% of subsidiary Universal Music Group's share capital to shareholders (link)and list the music label in Amsterdam by the end of the year. Investment group Bollore , which holds more than a quarter of Vivendi, gained 13%.

Analysts at UBS expect Universal to trade at a premium to Warner Music Group (WMG), given streaming deals and Universal's greater size. Vivendi will be nearly debt free after the spin-off, the analysts said.

Lanxess rose as much as 6% after agreeing to buy U.S.-based specialty-chemicals company Emerald Kalama Chemical for $1.04 billion from private-equity firm American Securities.

Other notable moves on Monday included the U.S. dollar falling back below 7 Turkish lira for the first time since August. Turkey's central bank more than doubled interest rates, to 17% from 8.25%, since September.

-Steve Goldstein; 415-439-6400; AskNewswires@dowjones.com

 

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02-15-21 0946ET

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