The Dow falls sharply as bond yields slip into fears of economic growth
Lower bond yields reflect investors’ concerns that the resurgence of the COVID case in some countries could delay the recovery of the global economy, so US equities fell on Thursday to trade finished.
How did the major indexes work?
Dow Jones Industrial Average
After falling more than 500 points at the session lows, it fell 259.86 points (0.8%) at 34,421.93.
S & P 500
It was 4,320.82, down 37.31 points, or 0.9%.
Nasdaq Composite Index
It fell 105.28 points (0.7%) and ended at 14,559.78.
Stock prices rose on Wednesday, the S & P 500 rose 0.3%, and the Nasdaq Composite recorded a rise of just over a point. This is enough to raise both indices and record the finish. The Dow rose 104.42 points (0.3%) to finish at 34,681.79.
What has driven the market?
U.S. equity benchmarks have receded and global equity tones have weakened, at least in part, due to a sustained supply bottleneck and the spread of coronavirus delta variants that cause COVID-19. This is because it may be delayed.
In a telephone interview, B. Riley National’s chief market strategist, Art Hogan, said price behavior across the market reflects a “tug of war between fears of inflation and fears of peak growth.” Concerns about a surge in inflation are now being superseded by concerns about economic growth “as good as this can be obtained,” he said.
After all, such concerns are likely to be groundless once the bottleneck is resolved and the company’s earnings report is released next week, Hogan said.
Earlier Thursday, the U.S. Department of Labor made its first unemployed allegations Rise to 373,000 From 371,000, which was revised upward in the 7 days ending July 3. Economists were looking for a claim to go down to 350,000.
The sharp drop in bond yields was partly due to concerns over a slowing pace of economic recovery and diminishing concerns about sustained inflation. 10-year Treasury yield BX: TMUBMUSD10Y After falling below 1.25%, it fell 3.4 basis points to 1.287%, the lowest since February. The long-term decline in yields has significantly flattened the yield curve, which is a plot of over-maturity yields from the Treasury.
Mizuho Securities’ US Chief Economist Steven Ricchiuto said, “By flattening the curve, market participants have already prioritized growth stocks of large-capitalization stocks to sell circulating stocks, and have experienced rotation to value stocks since September. Is reversed. “
Analysts scrambled to explain the Treasury rally, where 10-year yields fell by more than 1.40% at the beginning of the month. Explanations range from loss of confidence in economic recovery to the desire for global yields to technical ones. The reason why speculative bets on rising yields have been wiped out.
read: Why have 10-year Treasury yields plummeted to their lowest levels since February?Government debt is a new memetic asset on Wall Street, investors say
But Thursday’s tech stocks didn’t benefit from lower yields, as they often do. This may reflect the idea that the sector was overvalued in recent sessions and became vulnerable to profit taking in a wide range of markets. Sold out, Hogan said.
Analysts said concerns about the delta variant of the coronavirus weighed heavily on emotions.Japan was placed on Thursday Tokyo under the state of emergency It may continue throughout the Olympics.
However, some have made more optimistic notes that reflect the rise at noon.
Estee Dweck, Head of Global Market Strategy at Natixis Investment Managers Solutions, said, “Currently, cyclical rotation has been suspended, but there is still room for it to resume. I’m thinking. ”
Which company was the focus on?
On Thursday, we announced the Standard Range (SR) Model Y on it. Chinese websiteThe starting price was 276,000 yen ($ 42,589), which was reduced from 291,840 yen in consideration of government subsidies. According to the website, delivery will begin in August. Tesla shares rose 1.3%.
Attorney Generals in 36 states and District of Columbia filed proceedings Alphabet Inc.
Google alleged antitrust violations late Wednesday. Stock prices fell 0.7% and 1.1%, respectively.
Share WD-40 Co.
Up 0.5% after maintenance and cleaning products companies announced results and outlook late Wednesday Defeat Wall Street expectations..
Semiconductor stocks fell due to concerns about the rate of recovery of the global economy.micron
Qualcomm lost 2.3%
It fell by 1%.
AMC Entertainment shares
It soared in the afternoon after Reddit retailers united after this week’s share price fell by more than 20%. AMC shares rose 7.2% on the day.
What did the other markets do?
ICE USD Index
Currency readings against the six major rivals fell 0.3%.
Oil futures have wiped out early weaknesses and ended higher in US benchmarks
It rose 1% and closed at $ 72.94 a barrel.gold
Giving up a modest initial profit, it fell 0.1% to settled at $ 1,800.20 an ounce.
European stocks plummeted with the Stoxx Europe 600.
And London’s FTSE 100
Both fell 1.7%.
In Asia, Shanghai Composite
Hang Seng Index in Hong Kong down 0.8%
Japan’s Nikkei 225
It fell 0.9%.
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