The steep rise in U.S. Treasury yields put an emergency on the New York Stock Exchange. The KOSPI, KOSDAQ, and Asian stock markets are also tense about rising government bonds and bond yields.
According to the New York Stock Exchange on the 23rd, the US mortgage interest rate, which had declined after the Corona 19 pandemic, turned upward. Expectations of rising US Treasury yields and inflation are spreading to the real economy. The average interest rate on a 30-year fixed mortgage in the US has recently risen to 2.99%. This is the highest level since the corona pendemic. This short-term rise has not been seen for the past year or so. The rise appears to be a result of mortgage bond investors’ expectations of rising interest rates. When Corona 19 is quiet, economic recovery and interest rate rise are expected to appear in earnest. As interest rates rise, mortgage bond investors also want higher returns, and lending banks also charge more interest on borrowers.
U.S. Treasury yields began to rise in August of last year, and are rising more steeply as the Joe Biden administration pushes for strong economic stimulus measures. The 10-year interest rate surpassed 1.4%. As US Treasury yields wriggle, mortgage consumers who expected an interest rate hike are flocking to banks, causing an imbalance in supply and demand for loans. As stories of inflation keep coming out in the market, more and more consumers are trying to buy a house with a fixed-rate mortgage loan before an interest rate hike. US home sales rose 24% over the past month. Median home prices in the US rose 14.1%.
The Nasdaq Dow Index futures linked to the US New York Stock Exchange are falling due to the effect of a bond rate hike at this time. Bitcoin and Ethereum are falling sharply.
The following is the real-time price of the NASDAQ Dow Index futures linked to the New York Stock Exchange.
NAME TIME (EST) FUTURE DATE LAST NET CHANGE OPEN HIGH LOW
Dow Futures 6:20 AM Mar 2021 31,268.00 -165.00 31,460.00 31,518.00 31,190.00
S&P 500 mini 6:19 AM Mar 2021 3,875.75 -27.25 3,905.50 3,914.50 3,861.25
NASDAQ 100 mini 6:19 AM Mar 2021 13,410.25 -165.75 13,585.00 13,629.00 13,364.50
On the 22nd, Asian stock markets were fluctuating. Japanese and Taiwanese stocks rose, while Chinese and Hong Kong stocks fell. On the Tokyo Stock Exchange in Japan, the Nikkei 225 index rose 138.11 points (0.46%) to 30,156.03, ending the deal. The Tokyo Stock Market’s weighted average index, the Topics Index, rose 9.40 points (0.49%) to close at 1,938.35. US President Biden’s $1.9 trillion stimulus package is a boon to the stock market. Reports that the Bank of Japan could make changes to the ETF purchase program is burdensome for the Nikkei. It is expected that the Bank of Japan will change its policy in the form of purchasing ETFs only when necessary at the financial policy-making meeting in March. The Bank of Japan, which purchases ETFs worth 6 trillion yen to 12 trillion yen each year, is the largest shareholder in the Japanese stock market.
In the Chinese stock market, the Shanghai Composite Index fell 53.72 points (1.45%) to 3,642.44. The Shenzhen Composite Index closed at 2,416.67, down 52.00 points (2.11%). The People’s Bank purchased a 7-day reverse redemption conditional bond (reverse RP) worth 10 billion yuan. In the Hong Kong stock market, the Hang Seng index fell 324.90 points (1.06%) to 30,319.83. Share H ended at 11,893.68, down 213.09 points (1.76%). Xiaomi has denied local media reports that it is planning to manufacture electric vehicles. Tencent and Alibaba fell 3.7% and 2.5%, respectively.
Naver at KOSPI[035420]Ranked third in the KOSPI market cap. Since Naver first reached 3rd place in the market cap in October 2019, it has been up and down over the 3rd place with LG Chem, but recently, LG Chem has maintained the 3rd place. Naver’s share price continued to rise on the back of good performance and expectations for revaluation of corporate value following the listing on the Coupang New York Stock Exchange.
The KOSPI index ended at 3,079.75, down 27.87 points (0.90%). In the international financial market that day, the 10-year US Treasury bond rate once exceeded 1.4%. Samsung Life Insurance[032830](4.64%), Korea Zinc[010130](3.63%), Samsung Fire & Marine Insurance[000810](2.64%), SK hynix[000660](2.63%), Lotte Chemical[011170](2.37%) and so on. NCsoft[036570](-6.62%), SK Innovation[096770](-4.0%), Samsung SDI[006400](-4.03%), NAVER[035420](-2.89%), etc. fell. The KOSDAQ index closed at 954.29, down 10.82p (1.12%). HLB[028300](1.60%), Reno Industrial[058470](1.18%) rose. Seegene[096530](-9.20%) had a big drop. In the Seoul foreign exchange market, the won/dollar exchange rate rose 4.5 won to 1,110.4 won.’
As long-term government bond interest rates in the US and Korea have recently risen, concerns about inflation (inflation) are also raising their heads. It is an analysis that the expected recovery of the economic downturn due to the shock of Corona 19 and the resulting inflation forecast was reflected in the bond rate. Considering the trend of economic improvement, rising oil prices, raw materials and grain prices, and the increase in issuance of government bonds related to the additional budget (additional budget), inflation and market interest rates may continue to rise in the long term. The 10-year Korean Treasury Bond yield was also 1.875% as of the 19th, regaining its pre-corona 19 level. The highest in 21 months since May 13, 2019 (1.874%). In the case of the United States, expectations for inflation have risen considerably due to the Biden administration’s $1.9 trillion in economic stimulus plan. As international oil prices, raw materials and grain prices are rising, domestic prices are expected to rise gradually.
As interest rates rose, the market momentum declined. After shooting 3,266.23 during the week on the 11th of last month, the KOSPI has not exceeded the previous high for more than a month and has been crawling sideways around the 3,100 line. The controversy over inflationary pressure is expected to serve as a material to increase volatility in domestic stock markets for the time being.
The price of Bitcoin, a major cryptocurrency (virtual currency), is plummeting. It fell more than 8% in one day. The price of Ethereum is also plummeting. It is analyzed that this is due to the emergence of profit-taking sales due to the soaring without any other adjustment process, and the increased regulatory concerns of financial authorities. Musk’s remarks that bitcoin is expensive also contributed to the collapse of bitcoin. US Treasury Secretary Janet Yellen warned that cryptocurrencies could be used for illegal financial transactions. European Central Bank Governor Lagard urged more regulations on cryptocurrencies.
Major announcements and speeches that will affect the Dow Jones 30 Industrial Average, Standard & Poor’s (S&P) 500, and Nasdaq this week include the February 23 S&P/Case Sealer Home Price Index and February Consumer Confidence Index, Richmond. The annual manufacturing industry index, etc. will be released. Chairman Powell testifies in the Senate. Home Depot and Macy’s reveal their results. On February 24th, new home sales for January will come out. Chairman Powell testifies in the House of Representatives. Fed vice chairman Richard Clarida and Fed director Rael Brainerd were also scheduled to speak. NVIDIA results are coming out. On February 25th, the number of weekly unemployment insurance claims comes out. The adjusted GDP for the fourth quarter, orders for durable goods in January, and provisional home sales are also announced. Fed Vice Chairman Randall Quals, New York Governor John Williams, New York Governor, and Atlanta Governor Rafael Bostic, gave speeches. On the 26th, personal consumption expenditure (PCE) and personal income for January, the final value of the Michigan Consumer Attitude Index for February and the Chicago Purchasing Managers Index (PMI) will be announced.
Daeho Kim, Director of Global Economic Research Institute [email protected]
[알림] This article is for reference only in investment decisions, and there is no responsibility for investment losses based on this.