[서울파이낸스 김호성 기자] Major indexes of the New York Stock Market showed mixed trend due to the decision to end bank capital deregulation by the Federal Reserve System (Fed and Fed) and the expression of conflict between the two countries at high-level talks between the United States and China.
At the New York Stock Exchange (NYSE) on the 19th local time, the Dow index fell 234.33p (0.71%) compared to the previous trading day to 32,627.97, and the S&P500 index closed at 3913.10, down 2.36p (0.06%). The Nasdaq index, centered on technology stocks, rose 99.07p (0.76%) and closed at 13215.24. The Dow index fell by about 0.5% this week. The S&P500 and NASDAQ fell by about 0.8%.
The market watched the US interest rate trend, the end of bank capital deregulation measures, and high-level talks between the US and China. After the FOMC regular meeting this month, the Fed reaffirmed its policy to maintain low interest rates for a long time, but the government bond market remains uneasy.
Amid concerns that inflation will continue to dominate the market, the Fed announced today that it would end measures to ease SLRs by large banks on the 31st without any extension. This further amplified the anxiety in the government bond market.
SLR easing measures are a system that excludes government bonds and reserves held by large banks with a total asset of more than US$ 250 billion from the target of calculating the required equity capital. From April last year, just after the financial market fell into chaos due to the pandemic, the Fed temporarily exempted government bonds and reserves held by banks from the target of calculating required equity capital for one year.
Since the original purpose of the system was to induce large banks to buy government bonds and supply liquidity to the market, there were concerns that banks could sell government bonds if the system was not extended.
With the news that the SLR easing measures will end without extension, the 10-year US Treasury bond yield, which fell below 1.7% in the beginning of the market, rose back to around 1.74%.
In the stock market, bank stock prices were hit directly.
JPMorgan shares fell by about 1.6%, and Goldman Sachs and Bank of America’s shares fell by about 1%. However, as the banks have been preparing for the end of the easing measures, the analysis that there will be no significant impact on the supply and demand of bonds has also gained strength, reducing the rate of rise in interest rates. By the close of the stock market, 10-year interest rates reached 1.72%.
The conflict between the US and China at the first high-level talks also dampened investors’ sentiment.
US Secretary of State Tony Blingen, White House National Security Adviser Jake Sullivan, Chinese Communist Party Foreign Affairs Officer Yang Jietsu and Wang Yi, Chinese Foreign Affairs Commissioner and Minister of Foreign Affairs, headed three times ‘2+2′ in Anchorage, Alaska for two days from the 18th. Meetings’ proceeded. This is the first high-level face-to-face meeting with the U.S. after President Biden took office.
In both remarks on the previous day, the two countries had an unusual sermon and confrontation until beyond the scheduled time, and they were unable to narrow the gap in position even at the meetings that took place later. Eventually, the talks ended without a joint announcement.
US Secretary of State Blincoln criticized “China’s actions threaten a rule-based world order.” In response, Yang Jietsu, the Chinese Communist Party’s diplomatic politician, said, “The United States is agitating other countries to attack China.”
By category, Visa Card plunged more than 6.2% on the news of the Ministry of Justice’s anti-competitive activity investigation, leading to the decline of the Dow Index. By industry, financial stocks fell 1.2%. Technology shares fell 0.25%, but communications rose 0.8%.
New York stock market experts diagnosed that uncertainty in the stock market grew amid interest rate uncertainty.
Michael Murray, director of global market research at Boston Partners, said, “Looking at the daily stock price pattern for the past week, the ping-pong game is going on.” “I’m not sure if it’s a sign that you’re at any possible inflection point.”
Meanwhile, the volatility index (VIX) on the Chicago Options Exchange (CBOE) recorded 20.95, down 2.92% from the previous trading day.
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