(New York = Yonhap News) Correspondent Oh Jin-woo of Yonhap Infomax = Major indices in the New York stock market declined due to uncertainties in the US government and concerns about regulations on technology companies.
On the 11th (hereafter Eastern time), the Dow Jones 30 Industrial Average on the New York Stock Exchange (NYSE) closed at 31,008.69, down 89.28 points (0.29%) from the battlefield.
The Standard & Poor’s (S&P) 500 index closed at 3,799.61, down 25.07 points (0.66%) from the battlefield, and the technology stock-oriented NASDAQ index closed at 13,036.43, down 165.54 points (1.25%).
The mayor kept an eye on US political trends and future monetary policy prospects, including impeachment of President Donald Trump and discussion of additional stimulus measures.
Major indexes surged to all-time highs last week in anticipation that Joe Biden’s next administration will implement massive fiscal stimulus measures. U.S. President-elect Biden announced on the 14th that he would outline a stimulus package of “trillions of dollars”, encouraging investment sentiment for risky assets.
However, the level burden has also increased due to the recent share price surge. The continued confusion of the US politicians also pressured the investment sentiment on this day.
The Democratic Party has initiated a bill of impeachment proceedings against President Trump with less than a few days left in office. This week, the House of Representatives is expected to enforce a vote on the impeachment bill.
The impeachment of President Trump is not a factor that could trigger a change in the power structure, but concerns are raised that if the conflict between the Democrats and the Republicans intensifies, the stimulus package promoted by the next government may not be handled smoothly.
The outlook that President Trump’s supporters’ occupation of Congress last week could trigger tightening of regulations on large tech companies also pressured related companies’ stock prices.
President Trump has been criticized for encouraging extremist action by his supporters through tweets. Although Twitter has taken steps, such as permanently suspending President Trump’s account, concerns are raised that the Democratic government will rush to regulate social network services (SNS) companies when it is launched.
Accordingly, Twitter’s share price slipped more than 6.4% on that day. Facebook shares also plunged by 4%.
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In the bond market, the US Treasury bond yield steadily rises and rises above the 1.1% level, which is a factor that makes investors somewhat anxious.
Along with the rapid rise in interest rates, debate is heating up over the future monetary policy path of the Federal Reserve System (Fed and Fed).
Even inside the Fed, there are steadily mentions that tightening, such as tapering, could begin as early as the end of this year.
Atlanta Federal Reserve Bank President Rafael Bostik (Yeon Eun) said he is open to the idea of tapering this year, saying he is taking a strong economic recovery as his primary prospect.
He also mentioned the possibility of an interest rate hike as early as the second half of next year if the economy recovers quickly.
Another factor is the unstable US economic and health situation.
In the United States, employment in December of last year declined for the first time since April.
According to the statistics of Johns Hopkins University, the infectious disease situation is still serious, with the number of corona 19 confirmed cases in the world exceeding 90 million. In the United States, the number of hospitalized patients continues to be around 130,000.
By industry on this day, communication fell 1.76%, making me uneasy. The technology lead also fell by 0.94%. On the other hand, energy rose 1.62%.
Economic indicators released on that day were sluggish.
Conference Board announced in December last year that the US Employment Trend Index (ETI) reached 99.01. It fell slightly from the increased 99.05 figure in November last year.
New York stock market experts diagnosed that as the market was overheated, there could be a correction movement.
“We’ve been clearly becoming more cautious in the current level of stocks since the strength of the past few months,” said Matt Mulley, senior market strategist at Miller Brubbac. “I think most of the rally since last year’s March trough is over.”
He added, “We expect the correction to begin sometime in the first quarter of this year.”
On the Chicago Options Exchange (CBOE), the volatility index (VIX) recorded 24.08, up 11.69% from the previous trading day.
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2021/01/12 06:38 sent