[뉴욕증시]U.S. Treasury yields have slowed, but… Still inflation concerns

(Photo = provided by AFP)

[뉴욕=이데일리 김정남 특파원] The New York stock market rebounded slightly. As the surge in US market interest rates subsided and the risk of avoidance of risky assets eased, the stock market closed strongly.

Wall Street inflation concerns have calmed down…

According to Market Point on the 12th (local time), the Dow Jones 30 Industrial Average on the US New York Stock Exchange closed at 31,068.69, up 0.19% from the previous trading day. The Standard & Poor’s (S&P) 500 index closed at 3801.19, up 0.04%. The Nasdaq Index, which is centered on technology stocks, rose 0.28% to 11,3072.43.

Wall Street is focused on the inflation debate these days. It was the same on this day. The long-term market interest rate benchmark, the 10-year US Treasury bond yield, exceeded 1.18% during the day and fell below 1.13% in the second half of the trading day. As the recent steep rise in interest rates turned to a rebound, the stock market rebounded successfully.

The remarks of major Federal Reserve Bank governors turned a little towards the dove (preferring monetary easing). “The inflation rate will not reach the 2% target for the next two years,” said Boston Yen Governor Eric Rosengren. This means that we need to continue easing monetary policy. In this atmosphere, the value of the dollar fell. The dollar index, which represents the value of the dollar against the currencies of six major countries, fell 0.4% to 90.05.

This is why the price of risky assets such as oil and bitcoin rose in addition to the stock price on this day. Western Texas crude oil (WTI) for February delivery on the New York Commercial Exchange closed at $53.21, a 1.8% increase from the previous trading day. It is the highest in almost 11 months since February 21, last year ($53.38 per barrel).

That doesn’t mean that inflation concerns have been dampened. “Inflation may rise faster than expected,” said Kansas City Governor Esther George. Some of the recent stanzas are analyzes in line with the hawkish remarks of governors. There is still a sense of wariness that investment sentiment in the market may be weakened, but it is more weighty.

In addition, President-elect Joe Biden will unveil the outline of a multi-trillion-dollar stimulus package on the 14th. In the current atmosphere, the market is likely to accept this as a bad news for inflation rises rather than a good for liquidity expansion. The administration is likely to pour out astronomical money this year following last year, because the Federal Reserve System (Fed) has a difficult situation to release money with the administration as it did last year.

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Trump’s political uncertainty concerns are also growing. President Trump met with reporters before leaving the White House for a visit to the Mexican border in Texas that day, arguing that it is “really absurd,” and “arousing tremendous anger,” over the recent push for the Democratic Party’s impeachment against him. He did not admit charges of inciting the civil war, saying, “(My speech) was appropriate,” to the point that his speech prompted supporters to invade the Capitol. He said it was “the biggest witch hunt in political history.”

Economic indicators fell short of market expectations. According to the National Self-Employment Federation (NFIB), the small business optimism index in December of last year was 95.9. It fell from the previous month (101.4). It fell short of the expert forecast (100.0) surveyed by the Wall Street Journal (WSJ).

The Chicago Options Exchange Volatility Index (VIX), also called the Wall Street Fear Index, fell 3.11% to 23.33.

Stock markets in major European countries fell all at once. The UK London stock market’s FTSE 100 index fell 0.65% to close at 6754.11. Germany’s Frankfurt stock market’s DAX 30 index fell 0.08%, while the French Parisian stock market’s CAC 40 index fell 0.20%. The Euro Stoxx 50 index, a pan-European index, closed at 3612.13, down 0.23%.