(New York = Yonhap News) Correspondent Oh Jin-woo of Yonhap Infomax = In the New York stock market, major indexes declined due to the burden of rising interest rates despite the expectations of the next US President Joe Biden’s stimulus.
On the 14th (hereafter Eastern time), the Dow Jones 30 Industrial Average on the New York Stock Exchange (NYSE) closed at 30,991.52, down 68.95 points (0.22%) from the battlefield.
The Standard & Poor’s (S&P) 500 index closed at 3,795.54, down 14.30 points (0.38%) from the battlefield, and the technology stock-oriented NASDAQ index closed at 13,112.64, down 16.31 points (0.12%).
The mayor watched Biden’s stimulus package, the comments of the Fed Chairman Jerome Powell, and the US unemployment indicators.
The stock market remained uptrend until the mid-market.
The investment sentiment was supported by the fact that Biden-elect was planning to propose a stimulus plan to be promoted by the next government on this day. CNN reported that the size of the stimulus package would reach $2 trillion, and the New York Times (NYT) reported that a $1.9 trillion stimulus package would come out.
It is reported to include a $2,000 cash payment to Americans, support for small businesses, state and local government subsidies, and support for the distribution of a novel coronavirus infection (Corona 19) vaccine.
Fed Chairman Powell also made a dove (preferring monetary easing) remark.
He said it was “no time soon” about the timing of the rate hike. Regarding the recent controversial tapering (reduction of bond purchases), he said, “It is not time to discuss the exit yet,” he said. “At that time, the Fed will communicate the exit quickly and clearly.”
However, Chairman Powell said the economy will be able to recover to pre-pandemic levels much faster than it was worried about.
He also said that the Fed “will have the space for monetary policy again in a few years” and “the US doesn’t need helicopter money.”
Major indices expanded during the lecture by Chairman Powell, but then declined in reaction.
It can be interpreted that the burden of US interest rates rising again in the second half of the market was at work. The 10-year US Treasury bond rate fell to about 1.08% during Powell’s remarks, but then rebounded and rose to around 1.13%.
There are many concerns that the recent increase in US Treasury bond yields will put a burden on the valuations of high-growth technology stocks.
The US unemployment indicators have also deteriorated.
The Ministry of Labor announced last week that the number of unemployment insurance claims increased by 181,000 from the previous week to 965,000 (seasonal adjustment).
It is the most since the week of August 22 last year. The estimated 800,000 people compiled by The Wall Street Journal also exceeded the estimate significantly.
The number of people who claimed unemployment insurance for more than a week in a row until the week ended on the last two days increased by 199,000 to 5271,000.
However, the worsening unemployment did not put a heavy burden on the stock market as it was also grounds for the need for stronger stimulus measures.
The US House of Representatives passed a bill of impeachment against President Donald Trump on the previous day, but the impact on the financial market is limited.
On the other hand, the anxiety of the Italian government is mentioned as a new risk factor.
Former Prime Minister Matteo Ranchen, who heads the center-minded’Italia Viva IV’, a political party that constitutes the Italian coalition, said he would leave the coalition. Concerns about the collapse of the coalition are raised.
By industry, technology stocks fell 0.95% on that day, and communications fell 0.84%. Energy rose 3.01% and financial stocks rose 0.51%.
US import prices announced on the same day rose sharply than market expectations due to rising energy prices.
The Ministry of Labor announced that in December import prices rose 0.9% from the previous month. It exceeded the market forecast of 0.7%. Energy import prices soared 7.8%.
New York stock market experts expected expectations of stimulus measures to support investor sentiment.
“The stock market is expanding its upward trend as the three pillars of stimulus, vaccine and performance are still stable,” said Adam Krisapuli, founder of Vital Knowledge. “The $2 trillion stimulus package is largely in line with the market, and investors closely monitor interest rates. I need to see.”
“The impeachment of President Trump generally has no effect on the market,” he added.
On the Chicago Options Exchange (CBOE), the volatility index (VIX) was 23.25, up 4.68% from the previous trading day.
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2021/01/15 06:40 sent