Treasury bond yields are higher than FOMC… Dow 101 ↓ New York Stock Exchange Brief

Traders do business on the New York Stock Exchange (NYSE) in the United States. (Photo = Reuters = Yonhap News)

In New York, major indexes fell last night as Treasury yields rose sharply ahead of the US central bank’s Federal Open Market Committee (FOMC) meeting.

At the New York Stock Exchange (NYSE) on the 20th (local time), the Dow Jones Industrial Average closed at 30,706.23, down 313.45 points (1.01%) from the previous day.

The Standard & Poor’s 500 Index closed at 3855.93, down 43.96 points (1.13%) from the battleground, and the Nasdaq Index closed at 11,425.05, down 109.97 points (0.95%) from the battleground.

The size of the Fed rate increase reflected in the interest rate futures market is 0.75 percentage points. If the Fed raises interest rates by 0.75 percentage points again this time, this would be the third ‘giant step’ in a row. However, some argue that the possibility of a higher step (1% point increase) should be kept open.

A day before the results of the FOMC meeting, Sweden’s central bank raised its key interest rate by 1 percentage point. This is the second 1 percentage point rate hike among major central banks since Canada’s central bank raised the key interest rate by 1 percentage point in July.

Treasury yields are rising sharply, led by short-term bonds, as the Fed is expected to continue to tighten intensively in the short term. The yield on the two-year Treasury bond was more than 4%. This is the first time since October 2007. The 10-year government bond yield rose to a level of 3.6%, the highest since April 2011.

Seo Sang-young, a researcher at Mirae Asset Securities, said, “The US stock market began to decline as worries about a recession in Europe continued, and the issue of sluggish earnings caused by Ford’s supply chain instability dampened investor sentiment. I was mentally depressed,” he said.

On the same day, when Ford warned of a drop in vehicle deliveries as unfinished car inventory increased due to supply chain disruptions, it triggered a slowdown in earnings and plunged 12.32%. GM also fell by 5.63%.

Nike plunged 4.47% after Barclays downgraded its rating on the basis of increased sales volatility in China and reduced demand in North America and other markets.

Amid the economic downturn, financial stocks such as JP Morgan (-1.97%) and BOA (-1.50%), as well as logistics companies such as FedEx (-3.38%) and UPS (-2.42%), and machinery such as Caterpillar (- 2.26%) The industry was sluggish.

When Apple announced it was raising app store prices in Europe and Asia on the back of a stronger dollar, it rose 1.57% on expectations for improved earnings. Moderna fell 1.41% on the back of US President Bang-den’s comments on ending the pandemic, and as the US administration downplayed the meaning as a principled comment, the backlash flowed in and bought 1.41%.

Reporter Eunji Cha, Hankyung.com chachacha@hankyung.com

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