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Photo = REUTERS
The main index on the New York Stock Exchange was mixed, as tech stocks were hit by rising U.S. Treasury yields.
On the 22nd (US time) on the New York Stock Exchange (NYSE), the Dow Jones 30 industrial average closed at 31,521.69, an increase of 27.37 points (0.09%) from the battlefield.
The Standard & Poor’s (S&P) 500 index closed at 3,876.50, 30.21 points (0.77%) less than the battlefield, and the Nasdaq index focused on technology stocks fell 341.42 points (2.46%). ) at 13,533.05.
The market watched the trends in US Treasury yields, leading economic indicators, and news related to the new coronavirus infection (Corona 19).
As US interest rates continue to rise, tech stocks are putting a strain on the stock market.
The 10-year US Treasury rate rose to about 1.39% at a time during the day.
It has been on a steady rise from the highest level since February of last year.
However, since then, the increase has decreased slightly to around 1.37%.
The difference in interest rates on 2-year government bonds and 10-year bonds widened to the maximum in about four years.
Rising long-term interest rates and increasing differences in long-term and short-term interest rates are considered representative signs of economic recovery.
However, it can be a stressor in the stock market.
Rising acquisition costs can pose a risk to high-growth technology companies that have benefited from low interest rates.
Also, the investment appeal of stocks versus bonds is cut in half.
The Federal Reserve (Fed and Fed) has repeatedly expressed its willingness to maintain a relaxed monetary policy, but if interest rates continue to rise, market uncertainty about the possibility of a Fed adjustment will inevitably increase.
Consequently, in the recent stock market, concerns about rising interest rates, primarily tech stocks, are clear.
On this day, Tesla’s stock price plummeted more than 8.5% and Apple’s stock price fell close to 3%.
On the other hand, the business cycle, which is expected to benefit from an economic recovery like energy, is relatively strong.
Investors are eager to know what kind of diagnosis Fed Chairman Jerome Powell will give on rising interest rates in the Senate testimony against annual monetary policy scheduled for the next day.
The governor of the European Central Bank (ECB), Christine Lagard, said she is “watching” the rise in long-term interest rates.
Eurozone Treasury yields fell in response to President Lagard’s remarks.
Positive news came out regarding Corona 19.
British Prime Minister Boris Johnson announced plans to ease the lockdown in stages, starting with school attendance in early March.
It is flexible depending on the Corona 19 situation, but plans to lift all regulations by the end of June, Johnson said.
German Chancellor Angela Merkel would also have insisted on the need to establish a plan to mitigate the blockade.
The $ 1.9 trillion stimulus plan promoted by the United States government is also proceeding on schedule.
The Budget Committee of the US House of Representatives passed a stimulus bill that day.
The Democratic Party plans to pass the bill in the House later this week.
On this day, by industry, energy rose 3.47% due to a rebound in international oil prices.
Financial stocks were up 0.98% and industrial stocks were up 0.38%.
On the other hand, technology stocks fell 2.26%.
The economic indicators published that day were good.
The Federal Reserve Bank of Chicago (Yeoneun) announced that the US activity index for January was 0.66, down from 0.41 the previous month.
It was higher than the market forecast of 0.15 compiled by the fact set.
The conference board reported that the leading economic index for the US in January registered 110.3, 0.5% more than the previous month.
It beat the market forecast of 0.4%, compiled by the Wall Street Journal.
Dallas Yan’s Business Activity Index for February was 17.2, a sharp increase from 7.0 last month.
The market outlook also went well beyond 5.0.
New York stock market experts expressed concern about rising interest rates.
However, some believe that the situation is not overly sensitive to interest rates.
Hani Redha, Portfolio Manager at Finebridge Investments, said: “If interest rates go up, there is more demand for government bonds compared to other assets. If interest rates are too low, you can invest more money in stocks, but the interest rates go up “. When you start, things change, ”he said.
On the other hand, Baird Director Patrick Spencer said: “If US Treasuries are going to be attractive compared to tech stocks, 10-year interest rates should increase by about 4%. or more. The spread of vaccines and $ 1.9 trillion in stimulus will accelerate economic recovery and provide another positive power. “
He evaluated the increase in interest rates as a result of the economic recovery.
On the Chicago Options Exchange (CBOE), the volatility index (VIX) was 23.45, 6.35% more than the previous trading day.
/ yunhap news
