(New York = Yonhap News) Oh Jin-woo, correspondent for Yonhap Infomax = Major indexes in the New York stock market declined in the aftermath of a surge in US Treasury yields again.
On the 18th (US time) on the New York Stock Exchange (NYSE), the Dow Jones 30 Industrial Average closed at 32,862.30, down 153.07 points (0.46%) from the battlefield.
The Standard & Poor’s (S&P) 500 index fell 58.66 points (1.48%) from the battlefield to 3,915.46, while the technology stocks Nasdaq index plunged 409.03 points (3.02%) to 13,116.17.
The market watched key economic indicators such as the trend of US Treasury bond rates and unemployment.
As the Federal Reserve (Fed and Fed) reaffirmed its long-term low interest rate policy the previous day, the rise in interest rates, which seemed to ease, sharpened again in one day.
The 10-year U.S. Treasury bond rate soared, surpassing 1.75% at the beginning of the market. Even at the close of the stock market, it surpassed 1.7%.
The 30-year Treasury bond yield has also surpassed 2.5%, rising to the highest level since 2019, and the long-term interest rate is on a sharp rise.
Despite the Fed’s repeated easing remarks, it is interpreted as the impact of the market’s unresolved concerns over inflation.
The fact that the Fed raised its growth rate and inflation forecasts for this year is a factor stimulating concerns over inflation stronger than expected. There is still anxiety that the Fed may tighten faster if prices are to come strong.
Some point out that if the Fed adheres to its easing stance, inflation expectations will rise further and market interest rates will rise accordingly, leading to a dilemma.
As interest rates jumped sharply, stock market anxiety also intensified, centered on technology stocks. The rise in interest rates is a factor that increases the valuation burden of overvalued technology stocks.
Apple’s share price slipped by 3.4% on the day, and Tesla plunged close to 7%.
The Dow Index, which remained strong at the beginning of the market, also turned downward as the technology stocks became more unstable.
US indicators sent mixed signals.
The Ministry of Labor announced last week that the number of unemployment insurance claims increased by 45,000 from the previous week to 770,000 (seasonal adjustment). It was more than the 700,000 estimates compiled by the Wall Street Journal. The recovery of the job market has slowed somewhat.
The February leading economic index released by the conference board rose 0.2% from the previous month to 110.5. It fell short of the market forecast of 0.3%.
On the other hand, the manufacturing index for March released by the Federal Reserve Bank of Philadelphia was 51.8, the highest in about half a century since 1973. The market forecast of 22.0 was also significantly higher.
The Philadelphia Fed Index has also stimulated concerns over inflation. The March price and payment index soared to 75.9 from 54.4 in the previous month. This is the highest since 1980. Yon-eun explained that companies are constantly under pressure to increase production costs.
Another factor of concern is that vaccination is disrupted while the number of new corona19 infections is on the rise again in Europe.
Many European countries have temporarily suspended AstraZeneca’s vaccination.
However, the European Medicines Agency (EMA) announced that the AstraZeneca vaccine is safe and effective, and that the effectiveness of the vaccination outweighs the risk. Italy said it would resume vaccination the next day after EMA’s announcement.
The sharp drop in international oil prices also added to market uncertainty. Western Texas Crude Oil (WTI) plunged 7.1% from the battlefield on the same day due to friction between the US and Russia.
All industries fell on that day, except for financial stocks that rose 0.56% by industry. Energy plunged 4.68%, and technology led fell 2.85%.
New York stock market experts diagnosed that there was a lot of anxiety over inflationary overheating.
“It’s all about price expectations,” said Edward Park, chief investment officer at Brooks McDonald’s.
According to the Chicago Merchandise Exchange (CME) Fed Watch, the FF interest rate futures market was 25bp in September.
We reflected the possibility of an interest rate hike by 4.4%.
On the Chicago Options Exchange (CBOE), the volatility index (VIX) recorded 21.58, up 12.22% from the previous trading day.
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2021/03/19 05:46 sent