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(New York = Yonhap News) Yeong-sook Yoon, Correspondent for Yonhap Infomax = The New York stock market rose as geopolitical tensions between Russia and Ukraine eased somewhat.
At the New York Stock Exchange (NYSE) on the 29th (Eastern time), the Dow Jones Industrial Average closed at 35,294.19, up 338.30 points (0.97%) from the previous day.
The Standard & Poor’s (S&P) 500 index rose 56.08 points (1.23%) to 4,631.60, and the Nasdaq index, centered on technology stocks, closed at 14,619.64, up 264.73 points (1.84%) from the battlefield.
Investors kept an eye on news of easing tensions between Russia and Ukraine, movements in government bond yields and economic indicators.
Expectations for a ceasefire have risen as it is said that the fifth peace negotiations between Russia and Ukraine have been constructive and the Russian military has announced that it will drastically cut military activities.
After the fifth peace talks between Russia and Ukraine held on the same day, Russian Deputy Defense Minister Aleksandr Fomin said, “We will significantly reduce military activities in Kiiu and Chernivu regions. This will be implemented immediately.”
The Russian-Ukrainian negotiating delegation held the fifth peace negotiations in Istanbul, Turkey, and the Russian side said that “the negotiations proceeded constructively”.
This news strengthened the risk appetite.
The movement of government bond yields is also an area that the market is paying attention to.
The yield on the 5-year Treasury note and the 30-year Treasury bond yield reversed the previous day, and the yield on the 2-year Treasury and 10-year Treasury bonds reversed for the first time since 2019.
When short-term interest rates fall below long-term rates and yields reverse, the market sees this as a harbinger of a recession.
Philadelphia Federal Reserve Bank President Patrick Harker said today that the Federal Reserve may consider raising its key interest rate by 50 basis points if necessary.
He had previously expected a 25bp rate hike seven times this year, but said, “I am very open to going faster.
Harker also stressed that the bond market’s yield curve is a signal to the market and not a perfect tool for predicting a recession.
Experts believe that the chances of the U.S. economy falling into a recession right now are slim. However, given that there have been several recessions since the yield inversion, the recession debate seems likely to continue.
The US economic indicators are generally positive.
U.S. home prices rose at a faster rate in January than in the previous month.
The seasonally-adjusted January National Home Price Index, compiled by S&P CoreLogic Case-Shiller, rose 19.2% annually. This is higher than the 18.8% increase in December last year. The housing price index for 20 cities rose 19.1% on an annual basis, beating the 18.6% forecast by experts compiled by the previous month and the Wall Street Journal (WSJ).
The number of job postings in the US in February was 11.3 million, down about 20,000 from the previous month, but it was still at a high level. Voluntary retirement for job change was 4.4 million, an increase of 94,000 from the previous month’s 4.3 million. Retirement for job change is an indicator of how confident workers are in their job prospects.
The Consumer Confidence Index for March announced by the Conference Board recorded 107.2, an improvement from the previous month’s 105.7. The current condition index was 153.0, an improvement from 143.0 recorded in the previous month, and the expectation index was 76.6, down from 80.8 in the previous month.
Of the 11 sectors in the S&P 500, all 10 sectors rose, excluding energy-related stocks.
The company’s stock rose more than 3% after shipping specialist FedEx announced that founder and CEO Fred Smith would resign.
Shares of health care company United Health Group fell about 0.5% after news that it had decided to acquire LHC Group. Shares of LHC Group rose nearly 6%.
Shares of advisory firm Nielsen Holdings rose more than 20% on reports that a consortium led by Brookfield Asset Management and Elliott Management would acquire the company for $16 billion.
Analysts in the New York Stock Exchange said risk-like trading emerged as geopolitical tensions eased.
“The market has entered a risk-taking trade this morning on reports of progress in negotiations for a ceasefire between Russia and Ukraine,” Tom Essay, founder of Sevens Report Research, told MarketWatch.
“The prospect of a ceasefire between Russia and Ukraine has eased investor anxiety and has returned a positive vibe to the financial markets,” said Lukman Otunuga, senior analyst at FXTM.
According to the Chicago Mercantile Exchange (CME) FedWatch, the probability that the Fed will raise the key rate by 50 basis points at its May meeting in the Federal Funds (FF) interest rate futures market has dropped to 68.8%. The previous day, it was 74.9%.
At the June meeting, the possibility of a rate hike of 50bp or more fell to 77%. The previous day, it was over 80%.
The Chicago Board Options Exchange (CBOE) Volatility Index (VIX) fell 0.73 points, or 3.72%, to 18.90.
ysyoon@yna.co.kr
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