[뉴욕증시]Suddenly another government bond interest rate attack… Biden “Fire Money Now Starts”

US President Joe Biden. (Photo = provided by AFP)

[뉴욕=이데일리 김정남 특파원] The US New York stock market was mixed. As the US Treasury bond rate jumped to the highest level in more than a year, the Nasdaq index fell as major technology stocks continued to stagnate.

10-year Treasury bond rates soar 1.64% during intraday

According to Market Point on the 12th (local time), the Dow Jones 30 Industrial Average on the New York Stock Exchange in the United States closed at 31,2778.64. The Dow continued its high-breaking streak. The Standard & Poor’s (S&P) 500 index closed at 3743.34, up 0.10%. The S&P index also hit an all-time high. However, the NASDAQ index centered on technology stocks fell 0.59% to 13,319.86.

The market’s attention is on government bond yields. The 10-year U.S. Treasury bond interest rate started at 1.541% on the day and rose to 1.642% during the intraday (a drop in government bond prices). It is the highest level since February of last year. Recently, there has been demand for government bonds in the 1.6% range, but on this day, the sale suddenly struck. The 30-year interest rate began trading at 2.295%, reaching an intraday high of 2.404%. All long-term government bonds of 5 years or more have jumped to the point of a seizure. This week’s bidding for 3-year, 10-year, and 30-year Treasury bonds in the U.S. ended smoothly, which eased interest rate uncertainty, but it immediately shook the financial market.

Major tech stocks fell all at once. Apple shares closed at $121.03, down 0.76%. For Tesla, it fell 0.74% to $693.73. Stock prices of Amazon, Google, Facebook, and Netflix have also fallen.

Game company Roblox and e-commerce company Coupang, who hit the IPO this week, were also unable to avoid the waves. Roblox shares plunged 5.63% to close at $63.70 per share. In the case of Coupang, it fell 1.58%.

Inflation concerns didn’t come out of nowhere. The US gradually showing its willingness to open the economy is shaking the bond market day after day, and it is affecting other markets, including the stock market. President Joe Biden said in his White House speech the day before, “We will ensure that all US states and groups can designate all American adults as eligible for the COVID-19 vaccination by early May.” Sun) I will aim to have a small barbecue party with my family and friends during the holiday season.” The rise in government bond yields is one of the major signs of economic recovery and a material that can shake technology stocks that are not free from overvaluation controversy.

Biden’s’Free Money’ begins… Fear of inflation

Along with this, the fact that the Biden administration has a stance of fiscal expansion can always call for a sale of bonds. According to the White House, a $1.9 trillion in stimulus plan was finalized, and cash (check) payments of $1,400 per person will begin this weekend. That’s big enough to raise concerns about’retaliation consumption’. The preliminary value of the University of Michigan Consumer Attitude Index released on the same day was 83.0, far exceeding the market forecast (78.9).

President Biden said, “This law is not the end of our efforts,” and “I see it as just the beginning” at the White House Rose Garden. This is a statement that should be kept in mind that stocks may continue to be released in the government bond market.

Last month, the US Producer Price Index (PPI) met market expectations. According to the Ministry of Labor, last month’s PPI rose 0.5% from the previous month. It met experts’ estimates (up 0.5%) compiled by the Wall Street Journal (WSJ). However, this did not bring down the government bond rate.

The Chicago Options Exchange Volatility Index (VIX), also known as the Wall Street Fear Index, fell 5.57% to 20.69.

Stock markets in major European countries were mixed. The UK London Stock Exchange’s FTSE 100 index closed at 6761.47, up 0.36% from the previous trading day. Germany’s Frankfurt stock market’s DAX 30 index fell 0.46%, while the pan-European index Euro Stoxx 50 fell 0.32%. On the other hand, the CAC 40 index of the Parisian stock market in France rose 0.21%.