In the US stock market on the 22nd, the S & P 500 stock index continued to fall. It echoed that technology stocks were sold significantly one hour before closing. US Treasuries are down. President Biden has reappointed Powell as the next chair of the Federal Reserve Board (FRB).
Powell re-elected as next Fed chair, Brainard as vice-chair
S & P 500 species stalled at the end. Although it was rising during the day, it fell into the negative territory, pushed by the sale of technology stocks preferred by hedge funds. The high-tech Nasdaq 100 index is down 1.2%. Peloton Interactive and DocuSign have dropped significantly. The prices of baskets of software and internet companies that have not yet achieved profits, centered on Farfetch and Snowflake, have dropped by more than 5%.
Mike Zigmont, Head of Trading and Research at Harvest Volatility Management, said, “I don’t know why it collapsed late in the day, but stock prices have risen so far that it can’t be avoided at some point. No. This may be the beginning. “
The US swap market has fully factored in a 0.25 point rate hike at the Federal Open Market Committee (FOMC) in June next year, with a second rate hike expected in November next year.
S & P 500 species are 4682.94, down 0.3% from the previous weekend. The Dow Jones Industrial Average is up $ 17.27 (0.1%) to $ 35619.25. The Nasdaq Composite Index fell 1.3%. As of 4:35 pm New York time, 10-year bond yields rose 8 basis points (bp, 1bp = 0.01%) to 1.63%.
David Donavedian, Chief Investment Officer of CIBC Private Wealth Management, said of Powell’s re-nomination, “The bottom line is that nothing will change. The issues Powell should address are the same. So is their view that rising inflation will be transient, and if not, what will they do about it? ” “The choice to reappoint Mr. Powell means continuity,” he said.
In the foreign exchange market, the dollar index was at its highest level since September last year. The background is that US Treasury yields have risen following the reappointment of Mr. Powell. Demand for US 5-year bond auctions was lower than expected, which also contributed to the sale of refuge currencies other than the dollar.
Mike Schumacher and colleagues at Wells Fargo Securities said, “The US dollar has risen extensively following the announcement, but the yen has fallen sharply. The direction of these market trends is intuitive, as we expected. The market will settle in a day or two, “he said in a report.
As of 4:36 pm New York time, the Bloomberg Dollar Spot Index, which shows the movement of the dollar against the 10 major currencies, rose 0.5%. The dollar is up 0.8% against the yen to 1 dollar = 114.89 yen. The euro is down 0.5% against the dollar at 1 euro = 1.1236 dollars.
New York crude oil futures market rebounded. If the United States and other consuming countries cooperate in the release of strategic petroleum reserves (SPR), OPEC Plus, which consists of the Organization of Petroleum Exporting Countries (OPEC) and major non-OPEC oil-producing countries, may not increase supply as much as previously planned. The observation spread.
OPEC Plus warns, probable to respond to the release of stockpiles in consuming countries
The January contract for West Texas Intermediate (WTI) futures on the New York Mercantile Exchange (NYMEX) ends at $ 76.75 a barrel, up 81 cents (1.1%) from the previous weekend. The January contract for Brent North Sea in London ICE is up 81 cents to $ 79.70.
NY gold futures have fallen sharply. After the announcement of the re-nomination of Chair Powell, the rate of decline widened in response to rising dollar and US Treasury yields. The February contract for gold futures on the New York Board of Trade (COMEX) ended at $ 1809.10, down 2.4% from the previous weekend.
“Gold has a negative correlation with the dollar and a positive correlation with the long-term bond market, which is the main driver of the fall,” said Jay Hatfield, CEO of Infrastructure Capital Advisors. Pointed out.
Original title:U.S. Stocks Sink Into Close on Rout in Tech Shares: Markets Wrap（抜粋）
Treasuries Slide After Fed’s Powell Is Renominated, Auctions Sag（抜粋）
USD Jumps Near 14-Month High After Biden Fed Picks: Inside G-10（抜粋）
Oil Rises as OPEC+ May Adjust Supply in Wake of Reserves Release（抜粋）
Gold Extends Drops After Biden Nominates Powell for Second Term（抜粋）