(New York = Yonhap News) Correspondent Oh Jin-woo of Yonhap Infomax = Major indices in the New York Stock Market started mixed up on the 26th while observing the movement of US Treasury yields.
As of 10:04 a.m. Eastern Time, the Dow Jones 30 Industrial Average on the New York Stock Exchange (NYSE) traded at 31,171.85, down 230.16 points (0.73%) from the battlefield.
The Standard & Poor’s (S&P) 500 index traded at 3,820.04, down 9.3 points (0.24%) from the battlefield, while the technology stock-oriented NASDAQ index traded at 13,122.71, up 3.28 points (0.03%).
The market is keeping an eye on US interest rate trends, major economic indicators, and news related to stimulus measures.
As the interest rate on 10-year US Treasury bonds surpassed 1.5% on the previous day, the stock market’s anxiety also increased.
The rapid rise in interest rates raises the valuation burden for high-value technology stocks. In addition, as interest rates on risk-free government bonds exceeded the dividend yield of the S&P 500 index, the attractiveness of stock investment compared to government bonds has also been halved.
The rise in interest rates reflects expectations for economic recovery, but there are great concerns that the rate of growth is too steep. As a result, the negative side of rising interest rates has been further highlighted.
The NASDAQ index was uneasy enough to record the biggest drop in the day since October last year.
The market is not as unstable as the previous day, as the 10-year Treasury bond yield fell to around 1.47% at the beginning of the market. However, as interest rate volatility can increase at any time, caution remains.
Major economic indicators also came out at the expected level of the market, providing little volatility.
The US Department of Commerce announced that personal consumption expenditure (PCE) in January increased by 2.4% (seasonally adjusted) from the previous month. It rebounded from a 0.4% decline in December last year, but was slightly slower than the 2.5% increase in expert estimates compiled by The Wall Street Journal.
In particular, the fact that the inflation index remained at the expected level provided relief. Excluding volatile food and energy, the core PCE price index rose 1.5% year-on-year in January. It was in line with Wall Street’s expected 1.5% increase.
Major foreign media such as Barrence reported that the US$1.9 trillion stimulus plan will be finalized in the House of Representatives that day. The stimulus plan will be discussed in the Senate after the House is passed.
However, the possibility of amendment of the bill is raised as the Senate determines that the plan to increase the minimum wage cannot be included in this stimulus plan based on the budget adjustment method.
New York stock market experts are on the lookout for rising interest rates.
Charlie Ripley, chief investment strategist at Allianz Investments, said, “Up to recently, market participants have been able to handle the rise in long-term interest rates, but future interest rate rises are likely to be more difficult to digest.” “The real interest rate was too low, so if economic indicators improve, long-term real interest rates could continue to rise,” he said.
Stock markets in major European countries are weak. The pan-European index Stoxx 600 fell 1.04%.
International oil prices fell. West Texas crude oil (WTI) prices for April moved 1.27% to $62.74, down 1.27% from the previous trading day, while Brent crude moved 0.90% to $66.28.
According to Fedwatch of the Chicago Merchandise Exchange (CME), the Federal Fund (FF) interest rate futures market reflected the possibility of a 25bp base rate hike in September by 8.3%.
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2021/02/27 00:16 sent