Yazar: Geoffrey Smith
Investing.com – Tech stocks will open with a recovery after Monday’s heavy sales. The treasury is entering the third day in big bond sales, and the problems faced by the Chinese stock market continue with the government’s focus on reducing leverage this year.
Here’s what you need to know in financial markets on Tuesday, March 9th.
1. Third day of treasury sales
The US Treasury is starting three-day bond sales that will test market appetite for the export bombardment needed to fund the $ 1.9 trillion stimulus package.
The Treasury will share the sales results at 21.00 and will make a 3-year bond auction worth $ 58 billion. He is also willing to sell $ 38 billion in 10-year bonds on Wednesday and $ 24 billion in 30-year bonds on Thursday.
Longer-term returns have dropped from the highs they have seen recently, especially as foreign investors have been drawn to offered premiums compared to other secure assets. This also lifted it to a three-month high against traditionally low returns such as the yen and the franc. However, as a measure of the return of risk appetite, these increases have declined substantially in European trade. The dollar index fell 0.4% to 91,997.
2.China defeat continues despite government intervention
Heavy sales in Chinese financial markets continued, despite reports that a number of large government-backed mutual funds were intervening to prevent the defeat.
Technology-heavy Shanghai Shenzhen CSI 300 and Chinext indices dropped 2.2% and 3.5%, pushing losses over 20% last month. Investors withdrew their money from the table in response to new signs that the government wants to withdraw some of the financial and monetary support.
The government’s jobs report said one of the five major missions this year was leverage reduction, which calmed the boom in debt following the outbreak. Overall debt rose more than 30% last year, with 160% of GDP in the corporate sector: more than twice the rate in the US, according to the Bank for International Settlements data.
The government also said it wants to reduce its borrowing this year from 3.6% of GDP last year to 3.2%.
3. Technology stocks will recover; OECD raises forecast for growth
US stock markets will open higher. The Nasdaq will once again outperform after being in the focus of Monday’s sales.
The index rose by 2.4%, in contrast to the 2.4% decline that the index saw yesterday, while continuing to increase and rose 185 points. It increased by 1.1%.
The shift from tech to value names has not yet led to an overall slowdown in global share valuations: the MSCI World stock index is 82% of world GDP – 10% above the point it was in the fourth quarter of 1999, when the tech bubble peaked. But if world GDP grows as expected this year, the rate might look better: The OECD raised its forecast for world GDP from 4.2% in November to 5.6%. The difference, the agency said, was largely due to the US $ 1.9 trillion stimulus package.
4. Euro gathers data with the help of vaccine news
The European economy was slightly less bad at the end of last year, according to data released on Tuesday, showing slight upward revisions in both GDP and employment.
Although the data are largely ignored, the Euro has recovered after falling in recent sessions due to the widening of the yield differential with the US. Data released by the European Central Bank (ECB) on Monday showed that the ECB really slowed down its bond purchases last week. The euro rose 0.6% to $ 1.1913.
Germany’s announcement of plans to greatly accelerate the vaccination campaign supported the prospects for improvement in Europe, while preventing the export of AstraZeneca (NASDAQ 🙂 vaccines to Australia last week, Prime Minister Mario Draghi said, Italy is under the license of a Swiss company, Russia’s Sputnik will host the production of the vaccine.
5.Oil resistant, copper not much
China’s weakness hit commodity prices, but crude oil broke the weakness following the OPECD forecast. Industrial metals, on the other hand, performed poorly.
It was $ 65.91 with an increase of 1.3% and it was up 1.5%.
In contrast, it tested the $ 4 level again and traded at $ 4.0370, down 1.4%.
The American Petroleum Institute will share weekly stock data at the usual time.