A day after the Dow Jones Industrial Average closed above 1,000,000 for the first time, U.S. investors clashed with investors selling government bonds and high-value technology stocks. Stock futures are down.
S&P 500 futures fell 0.4% after the broad market gauge hit an all-time high on Wednesday. The Nasdaq 100 futures fell below 1%, pointing to losses in the tech sector G sector after a three-day gain. The Dow Jones Industrial Average has a high of 0.1%. The benchmark in blue-chip stocks became a new milestone after the Federal Reserve promised to maintain its easy monetary policies.
Investors in the 10-year U.S. Continued to sell the notes on the condition that inflation would rise rapidly as the economy improved, with fixed-income investments reducing the value of returns. Yields on 10-year Treasury notes rose 1.721% on Wednesday, reaching 1.641% on Wednesday, the highest in more than a year. Yields, which rise when bond prices fall, were as low as 0.915% near the start of the year.
“It’s all about inflation expectations: the fact that inflation expectations are being met beyond the Fed’s targets is boosting bond markets,” said Edward Park, Brooks McDonald’s chief investment officer.
In recent weeks, the rise in bond yields and the growing optimism of investors that the economy will bounce back quickly have quenched their appetite for rich-value tech stocks. Instead, they are focusing on sectors such as banks, airlines and energy companies, which could benefit more when social and business activity increases. Federal Reserve officials said Wednesday that they expect the economy to recover faster than it did a few months ago.
“Powell and the Fed did a pretty good job of navigating an volatile market and delivered enough to make sure equity volatility didn’t increase, but he said he didn’t put any revenue in the yield.”
U.S. Unemployment claims that data for the week ended March 13, at 8:30 a.m. ET, gives investors a view on the health of the labor market. First-time applications for unemployment benefits are close to the lowest level of epidemics, but historically remain elevated. Economists surveyed by The Wall Street Journal expect filing for job claims, a proxy for layoffs, which rose from 12,12,000 last week to 1,000,000 last week.
Rising bond yields and rising economic optimism have quenched the appetite for tech-rich stocks.
Photo:
Carlo Text / Reuters
“The thing to look at is the employment figures and the central banks are looking at all of this,” said Michael Matthews, Invesco’s fixed-income fund manager. “The Fed and all the central banks have decided that it is better to keep the economy warm, help recovery, get as little unemployment as possible.”
Bond investors are betting that the Fed will raise interest rates over the next two years, despite Wednesday’s data, as most policymakers still expect to maintain ultrallo interest rates until 2023. Only seven of the Fed’s 18 officials expected a lifting rate in 2022 or 2023. From five in December.
“Get it [officials] “No one is trying to stick to it for the next three years, but the market is trying to challenge it,” Mr Matthews said. “Risky assets will be supported, if the treasury does not sell more, it will be supportive.”
Inflation, meanwhile, is expected to send investors in search of higher returns, encouraging them to abandon safe havens such as government bonds, he added. “This morning, the markets woke up and decided that if the Fed kept policy so slow, they would want a higher risk premium,” Mr Matthews said.
Overseas, pan-continental stocks rose 0.4% in the Europe 600.
Bank of England expects interest rates to remain unchanged as officials unveil their monetary policy decision on ET in the morning.
In Asia, most major benchmarks closed higher. China’s Shanghai Composite Index rose 0.5% while Hong Kong’s Hang Seng rose 1.3%. Australia Australia’s S&P / ASX 200 is down 0.7%.
Write to Caitlin Ostroff at [email protected]
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