The New York stock market closed higher last night. While US Treasury yields turned downward, expectations for additional stimulus measures led the index to rise. The backlash from the recent stock price decline has also increased.
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On the 12th (local time) on the New York Stock Exchange (NYSE), the Dow index closed at 31,068.69, up 60.00 points (0.19%) from the previous trading day. The Standard & Poor’s (S&P) 500 index rose 1.58 points (0.04%) to 3801.19, while the technology stock-oriented NASDAQ index also jumped 36.00 points (0.28%) to 13,072.43.
Recently, the US Treasury bond rate has risen sharply. The mayor is raising expectations for further stimulus and economic improvement following the Blue Wave that the US Democratic Party sweeps through the White House and Senate and House Congress. In addition, rising inflation expectations and re-adjustment of bond purchases by members of the US Central Bank (Fed) are cited as reasons for the rise in government bond yields.
The rise in US Treasury yields has a negative impact on the stock market. However, if it is not a sharp rise, it could have a positive impact on the stock market, a risky asset, in anticipation of an economic recovery.
Sangyoung Seo Kiwoom Securities(155,500 -4.01%) “The US 10-Year Treasury Bond rate rose to 1.186% during the intraday and then fell to 1.13% in the second half of the market.” The rise has closed,” he said.
The expectation that the Joe Biden administration, which will be launched on the 20th, will lead the economic situation with a large-scale stimulus package is also supported. Biden-elect is scheduled to unveil the outline of a specific stimulus package on the 14th.
However, political turmoil related to President Donald Trump’s supporters’ occupation of the Capitol and strengthening regulations on social media (SNS) companies, such as Facebook, are a burdensome factor.
The financial, energy, and electric vehicle sectors were strong on expectations of a government bond rate hike. JPMorgan and Bank of America rose 1.57% and 1.78%, respectively.
Tesla jumped 4.72% on the back of the recent decline in stock prices. GM soared 6.24% on the announcement that it will launch an electric van that was unveiled at the end of this year. Ford rose with 5.16%.
ExxonMobil, an energy company, and Caterpillar, which leads the infrastructure industry, were strong at 2.22% and 1.90%, respectively, on inflation expectations. Intel rose 3.30% when it announced its new chip at CES 2021, the world’s largest electronics show. Taiwanese TSMC, which produces Intel chips, also slightly increased by 0.33%.
Yoon Jin-woo, reporter at Hankyung.com [email protected]
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