[Marchnad yr UD]2023 starts with stocks falling, government bond yields fall – around 131 yen – Bloomberg

The US stock market continued to fall on the 3rd. A slowdown in demand at Tesla and Apple has highlighted renewed concerns about growth stocks and the outlook for the US economy as the Fed continues to raise interest rates.

The S&P 500 stock index and the technology-focused Nasdaq 100 index ended trading in negative territory on the first day of 2023. However, the margin of decline narrowed toward the end.

Apple fell and its market capitalization fell below $2 trillion. Concerns about iPhone supply during the critical holiday quarter have increased. Tesla is also cheaper. Global vehicle deliveries for the fourth quarter of 2022 (October-December) fell short of market expectations, despite the unprecedented measures such as the provision of major incentives in the two major markets.

Apple plunges, market capitalization falls below $2 trillion – iPhone supply concerns, etc.

Tesla shares fall 14% at one point, deliveries are below expectations for 3 quarters in a row (1)

“What markets are worried about at the beginning of the year is how deep a recession is likely to be,” Sam Stovall, chief investment strategist at CFRA, told Bloomberg Television. “Few believe that recession itself can be avoided, especially with the yield curve so inverted that we now expect to be in an earnings recession,” he said.

US Treasures

US Treasuries rise. Yields fell across all maturities, with the 10-year bond yield temporarily falling 15 basis points (bp, 0.01%) to 3.72%. As inflation eased, there was considerable speculation that the Fed would further slow rate increases. German inflation slowed on the day, also supported by higher German bunds.

German inflation slows more than expected in December as the government helps gas prices

“The last two weeks of 2022 can be considered bearish for US rates,” said Ian Lyngen, head of US rates strategy at BMO Capital Markets, in a report in a period of seasonal volatility. “As investors return from the holidays, we expect the ‘unthinkable’ to be the ultimate winners,” he wrote.

foreign exchange

The dollar rose broadly in the foreign exchange market. Trading was active, supported by monthly hedge flows and other factors. The Yen depreciated slightly against the dollar to around 131 yen. During Asian time, there was also a scene where yen was bought up to 129.52 sen at one point. At the January 18th policy meeting, the Bank of Japan was aware of the possibility of monetary policy tightening.

“The yen’s strength may be a sign that markets increasingly believe the Bank of Japan is at the start of a new monetary policy cycle,” said Sid Bhushan, an analyst at Goldman Sachs. Reports that former BOJ deputy governor Hirohide Yamaguchi is the frontrunner to be the next governor may also boost the yen, he said, adding, “He’s a more hawkish choice than other candidates.” He noted.

“Even after the recent rally, the Yen is currently at a very undervalued level,” said Rajeev DeMelo, Geneva-based global macro portfolio manager at GAMA Asset Management. “I expect negative interest rates to end by April.

Yen hits highest against US dollar since June 2010 – Yen trends higher due to BOJ policy change (1)

raw

New York crude oil futures fell sharply. Crude oil plunged to its steepest decline since mid-November, after weaker sentiment across financial markets and warm winters around the world eased concerns about the energy crisis.

The price of dollar-denominated goods was too expensive as the dollar strengthened in the foreign exchange market. Natural gas prices fell to their lowest level in 11 months as temperatures in the West and elsewhere were above average for the time of year.

Gas crisis fears are quickly receding as much of the world experiences an unexpectedly warm winter as gas futures fall

West Texas Intermediate (WTI) futures for February delivery on the New York Mercantile Exchange (NYMEX) fell $3.33, or 4.2 percent, to close at $76.93 a barrel. London ICE North Sea Brent March delivery fell $3.81, or 4.4%, to close at $82.10.

Money

New York’s gold futures market rose for three consecutive business days, hitting a six-month high. Yields on US Treasuries fell on speculation that the Fed would ease its hawkish stance, making gold, which lacks interest, more attractive to invest.

“Momentum trading models are all long,” said Marcus Garvey, head of commodities strategy at Macquarie Group.

With the release of last December’s US jobs report on Thursday, traders will be looking for signs of whether rising wage pressures are easing.

Gold futures for February delivery on the New York Mercantile Exchange (COMEX) rose $19.90, or 1.1 percent, to $1,846.10 an ounce.