(Photo = Getty Image Bank)
Financial markets around the world are tense as U.S. Treasury yields soar sharply. Major figures, including Fed Chairman Jerome Powell, made easing comments one after another, but the trend of interest rates has not subsided and the stock market is focused.
Expecting’recovery’… US Treasury yields soar to 1.6% during intraday
On the 25th (local time), the US 10-year Treasury bond rate soared to 1.614% during the intraday. The level is similar to that of mid-February last year, when the new coronavirus infection (Corona 19) spread into a pandemic and terrorized the financial market. After that, the 10-year interest rate ended at 1.53%.
The reason for the surge in US interest rates is that expectations that the global economy will recover rapidly with the spread of the Corona 19 vaccine is growing. Concerns have risen that inflation could rise significantly, with the addition of the Joe Biden administration’s massive stimulus measures.
Kim Il-hyuk, a researcher at KB Securities, said, “If inflationary pressure rises, there is growing concern that the central bank will urgently recover the stimulus policy and raise the benchmark interest rate. In the aftermath, the long-term interest rate rose rapidly, but the short-term Interest rates are also starting to react,” he analyzed.
Researcher Kim was also concerned that the intervention of central banks in major countries would not work on the market. Earlier, Fed Chairman Jerome Powell said, “I will not raise interest rates until the inflation target is met,” and suggested that the current’zero interest rate’ situation will be maintained for the next three years.
Atlanta Federal Reserve Bank President Rafael Bostik (Yeon-eun) also stressed that “I don’t worry about rising government bond yields. I don’t even have to think about tapering (reducing bond purchases),” but US bond yields soared again. Following the US, the European Central Bank (ECB) also expressed its intention to intervene, saying it is paying attention to the rising interest rate, but the eurozone interest rate continued to rise.
Researcher Kim pointed out that the Fed could be more active. It is explained that it is possible to respond to rising interest rates by lowering concerns about early austerity, further lowering inflation expectations or by showing a card to increase the proportion of long-term purchases.
Stock prices fluctuated as government bond yields soared sharply and jumped above the stock dividend yield (1.51%). This is because investor sentiment sharply declined as the attractiveness of investment in bonds has emerged.
Nasdaq plunges by 3.5% “The bottom of the stock market is solid”
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The New York Stock Market literally fell into ruin. The Dow Jones 30 Industrial Average and the S&P 500 Index, which showed strong expectations for the recent economic recovery, plunged 1.75% and 2.45%, respectively. The Nasdaq Index, which is mainly made up of technology stocks that are directly affected by rising interest rates, plunged 3.52%. The NASDAQ recorded the largest daily decline since the end of October last year.
On this day, the domestic stock market is also falling. As of 9:21 am, the KOSPI has dropped more than 3% compared to the previous day, and the 3000 line is in jeopardy. The KOSDAQ also plunged around 3% and fell to 900.
Stock market experts forecast that stock market volatility will expand amid fears of a surge in interest rates.
Kim Hwan, a researcher at NH Investment & Securities, said, “The rise in interest rates acts as a discount rate increase for the stock price, so it is highly likely to lead to an adjustment factor for the stock price.” I will support it.”
Accordingly, Researcher Kim recommended that the proportion of technology stocks with solid earnings be maintained and a portfolio that generates returns with economic-sensitive value stocks with high momentum.
Lim Seong-cheol, a researcher at Heungkuk Securities, made an observation that stock market volatility may be limited. It is explained that if the stock market rises sharply last month, the adjustment will be acceptable.
Researcher Lim emphasized, “As the US has announced that it will maintain a low interest rate for a long time, inflation concerns are expected to gradually subside,” and emphasized that “the stock market will set its direction toward’up’ after going through an adjustment phase.”
Against the backdrop of an inevitable rise in the stock market, ▲ declining US corona spread and increasing US vaccination rate ▲ Domestic vaccination start ▲ China’s 4300 trillion won economic stimulus plan ▲ Strong domestic export indicators ▲ Uplifting KOSPI profit estimates this year and next year I put it.
Chae Seon-hee, Hankyung.com reporter [email protected]