‘Interest rate seizure’ US stock market… The first inflection point in the’Cheondang-Hell’ fall on the 10th.

U.S. Treasury yields and markets are “pushing and pulling” day after day. The New York Stock Market is going back and forth between hell and heaven amid concerns about inflation and the fluctuations in government bond yields.

On the 9th (local time), the NASDAQ index ended at 13,073.82, up 3.69%. It surged to 4% at one time during the week. It showed the opposite pattern from the previous day (-2.41%). The Dow Jones (0.10%) and the S&P500 (1.42%) are also bullish.

It was Tesla, the’spearhead’ of technicalism, who rode the roller coaster. Tesla, which fell 5.85% the day before and plunged for 5 consecutive trading days, recorded $673.58, which soared 19.64% on this day. It is the largest daily increase since the 3rd of last month. Apple, Facebook, Amazon, and Alphabet also rose to around 4%.

It is analyzed that the reversal of the market is the learning effect of buying a low price. Mark Odo, portfolio manager at Swan Global Investments, said, “The perception of low-priced buying is deeply imprinted on people.”

Matt Malay, chief market strategist of US asset management firm Miller Tabak told CNBC, “These stocks have rebounded greatly because a lot of tech stocks were poured out in a short time. The question is whether this rebound is a temporary stock price recovery after a major decline.” Pointed out.

In the end, opinions converge that the interest rate of government bonds is a factor that’heard and released’ the stock market, including technology stocks. The rebound in technology stocks on this day was also affected by the stabilization of government bond yields. The US 10-year Treasury bond rate, which soared 1.6% the day before (1.598%), fell to 1.538% on the day. The market, which had been shaken by the news that investors were rushing to the $58 billion 3-year Treasury Bond bidding held on the same day, has calmed down.

Edward Moya, senior market analyst at Oanda, a US foreign exchange brokerage firm, said, “The movement of technology is tied to the yield of government bonds,” and “Many of the market participants are skeptical of the prospect that (today’s) rebound will continue.” In a situation where there is a high possibility of an increase in government bond yields, the stock market is in a situation where the wind turns.

An event that will be an inflection point that will shake the mind of anxious investors continues. The first thing that stands out is the bidding for US government bonds. This is because the bidding of $38 billion worth of 10-year bonds on the 10th and $24 billion of 30-year Treasury bonds on the 11th could be another measure.

On the 9th, the three-year bidding was successfully passed, and the market fluctuations eased, but we cannot be vigilant. On the 25th of last month, the 10-year interest rate soared to 1.61% during the intraday and the market suffered a’interest rate attack’ because of the sluggish bidding for 7-year government bonds that day.

Gennady Goldberg, an interest rate strategist at TD Securities, told the Financial Times (FT), “Investors are like sitting on a thorn cushion until the bidding is over.” There is also a concern that it may be as bad as or worse.” If demand for long-term government bonds is sluggish in bidding on the 10th and 11th, a surge in interest rates (decrease in bond prices) could be reenacted.

Seo Sang-young, a researcher at Kiwoom Securities, said, “The reason the US Treasury bond rate does not drop significantly is because the wait and see tax to watch 10-year and 30-year bidding is strong.” “If the bidding result is bad and a $1.9 trillion stimulus plan is implemented, The possibility of rising interest rates cannot be ruled out.”

There are also views that are optimistic about the success of the bidding as the interest rate of government bonds rises. Padrerick Gabi, CEO of ING Global Bond Strategy, said, “Compared to a few weeks ago, the current interest rate is attractive.”

Japan, the biggest player in the international bond market, could be at the forefront. “Hedge fund giant” David Teffer, chairman of Appaloosa Management told CNBC on the 8th, “As the US Treasury rate rises, it has become an attractive asset for Japanese investors.” It was expected. As bond demand rises and bond prices rise, interest rates fall.

On the other hand, the prospect of’new bond king’ Jeffrey Gundrach, CEO of Double Line Capital, is pessimistic. He said, “Looking at the US economic growth rate and the interest rate of German government bonds, there is room for the US Treasury bond yield to rise,” he said. “The 10-year interest rate can reach 3%.”

Another variable is the increase in the US Consumer Price Index (CPI) for February, released on the 10th. Interest is focused on whether a number that exceeds the market forecast will come out. This is because concerns over inflation in the market (expectations of inflation) are growing, which can raise government bond yields. According to Barence, a US investment magazine, the CPI growth rate that experts expect is 1.7% (compared to the same month last year).

In a webinar on the 9th, Kathy Wood, CEO of Arc Investment, who is called’donnamu (cash + wood) sister’ in the domestic stock market due to investments such as Tesla, said, “As the price fell due to Corona 19 last year, there may be a base effect.” It could be close to 4%.”

Reporter Seungho Lee [email protected]