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Dow Jones futures fell today. Indicating that the Wall Street stock market will fall tonight. While investors are concerned about the rebound in US government bond yields. And political instability in the US.
At 8:36 p.m. Thai time, Dow Jones futures were down 55 points, or 0.18%, to 30,919 points.
The 10-year US Treasury yield reached 1,174% overnight, the highest since March 20, 2020, while the 30-year government bond yield rose to 1,904%. . What is the highest level since March 2020 as well?
Investors worry that rising U.S. Treasury yields will boost inflation in the United States. This may make the Federal Reserve (Fed) decide to delay the purchase of government bonds. This includes Mortgage-Backed Debt Securities (MBS).
Investors are also concerned that stocks will get expensive, with the S&P 500’s P / E Forward ratio now at 22.7x, close to its highest level since 2000.
Increasing the P / E Forward ratio will indicate a drop in the market in the next phase. At the moment, the stock has a high value compared to the benchmark in the past.
Investors are attentive to the disclosure of the 4Q2020 results of listed companies. JP Morgan Citigroup and Wells Fargo will release the results on Friday. While analysts predicted that S&P 500 companies will experience a 9.8 percent drop in performance in 4Q2020, but increase 16.4 percent in 1Q2021.
The US House of Representatives will vote on a motion to impeach President Donald. Trump today after he incited his supporters to raid the House of Parliament on Wednesday. To hinder the process of announcing Mr. Joe’s victory. Biden in the presidential election
The motion is expected to be approved by the House of Representatives. But it could be overturned in the Senate. For lack of adequate support
President Trump said that Getting him out of office is dangerous for America. While it will create dissatisfaction with many Americans
President Trump’s comments raised concerns that his supporters could be violent, while Joe Biden is due to take office as president of the United States on January 20.
Goldman Sachs chief analyst Jan Hatzius said: US equity and bond markets could soon revitalize strongly. Due to rising yields on US government debt. And the fact that the Fed started to slow down the stimulus package.
Wall Street stocks hit record highs on Friday. And if considering as of March 2020 what is the period in which the coronavirus began to spread in the US The Dow and S&P 500 have recovered almost 70%, while the Nasdaq has soared more 80%.
The yield on 10-year US Treasuries rose above 1% last week. After the Democrats won the Senate elections in Georgia. This allows the party to have absolute power in both the White House, the Senate and the House of Representatives.
The US government bond is the benchmark bond for debt instruments around the world. The rally in US government bond yields has also led to a rise in bond interest rates around the world. Cause companies to spend more money paying debts That will affect the financial status AND the price of the company’s shares
In addition, the Fed will begin to slow down its stimulus package through a quantitative reduction (QE) of its bond purchase limit, it will reduce the injection of money from the Fed into the economy. This will have a serious impact on the stock market as seen in 2013.
However, Hatzius said Goldman Sachs remained confident in the US stock market for the long term. It is believed that the market will continue to trend upward. The positive factor was the low inflation rate. And fiscal measures are still conducive to economic recovery.
Goldman Sachs last week revised its forecast for the US economy this year. It is expected to expand 6.4% from the previous forecast of 5.6% in response to the new stimulus package under the Joe Biden administration.
