Stock market down, bond interest rates up due to Middle East instability and strong consumption… Fear index highest in 5 months | Segye Ilbo
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The 10-year U.S. Treasury bond rate rose to the 4.6% range, the highest since November last year… International oil price closes weak
Due to political instability in the Middle East and continued strong consumption in the United States, U.S. Treasury yields soared and the New York stock market closed weakly on the 15th (local time).
On this day in the New York Stock Exchange, the Dow Jones Industrial Average ended trading at 37,735.11, down 248.13 points (-0.65%) from the previous day.
Photo = AFP Yonhap News
The Dow index has recorded a decline for six consecutive trading days since the 8th, giving up all gains since the beginning of the year.
The Standard & Poor’s (S&P) 500 index closed at 5,061.82, down 61.59 points (-1.20%) from the previous day, and the Nasdaq index, centered on technology stocks, closed at 15,885.02, down 290.08 points (-1.79%) from the previous day.
While the sense of crisis in the Middle East increased last weekend due to Iran’s attack on Israel, the sharp rise in bond yields due to expectations of continued solid growth in the U.S. economy acted as a burden on the stock market.
March retail sales in the United States announced on this day increased 0.7% compared to the previous month, showing an increase that exceeded market expectations. The increase rate in February was also adjusted upward from 0.6% to 0.9%.
‘GDP Now’, a growth rate forecast model estimated and released by the Atlanta Federal Reserve Bank, raised the US growth forecast for the first quarter of this year from 2.4% to 2.8%.
With consumer prices showing a ‘surprising rebound’ in March announced on the 10th and consumption showing solid results, expectations have grown that the U.S. Federal Reserve will lower interest rates later and less frequently.
The heightened sense of crisis in the Middle East due to Iran’s attack on Israel last weekend also increased risk aversion.
The Chicago Board Options Exchange’s (CBOE) Volatility Index (VIX), also known as the ‘fear index’, rose 1.84 points from the previous trading day to 19.15 at the close of the New York Stock Exchange on this day. This is the highest level in five months since the end of October last year.
“Everything is trading on every little bit of news coming out of the Middle East,” said Alex McGrath, chief investment officer at Northend Private Wealth.
Tesla plummeted 5.59% from the previous trading day on reports that it would begin large-scale workforce reductions. U.S. software company Salesforce plunged 7.3% on news of negotiations to acquire data management company Informatica. Investment bank (IB) Goldman Sachs rose 2.9% on strong performance in the first quarter.
U.S. Treasury yields soared.
According to electronic trading platform Tradeweb, the yield on 10-year U.S. Treasury bonds was 4.61% at the close of the U.S. stock market on this day, up 9bp (1bp = 0.01% point) compared to 4 p.m. on the 12th.
This is the first time in five months since November 14 last year that the 10-year maturity U.S. Treasury yield has risen to the 4.6% level.
Meanwhile, international oil prices fell. On this day, the closing price of Brent crude oil futures for June delivery on the ICE Futures Exchange was $90.10 per barrel, down $0.35 (0.4%) from the closing price of the previous trading day.
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