Yazar: Geoffrey Smith
Investing.com – Bond yields are rising again, putting pressure on tech stocks. The market is trying to digest the Fed’s pigeon guide. The Bank of Japan may relax yield curve control at the meeting, and the Norwegian central bank has tightened the timing of the first rate hike. Europe is struggling over the difficult supply of vaccines. Nike reports its earnings. And oil is on the decline as investors cut their bets on recovery in demand.
Here’s what you need to know in financial markets on Thursday, March 18th.
Bond sales continue as markets try to digest Fed message
The sale on long-term bonds continued as the market tried to digest the Fed’s dovish message. The Fed doubled its assumption that underemployment in the economy will continue to keep core personal consumption spending just above 2% until 2023.
Treasury stock yield rose to 1.75%, the highest level since January 2020, while the bond yield surpassed 2.50% for the first time in three years and then declined to 2.49%. These moves add color to the Treasury’s inflation-related 10-year bond auction.
While the Fed’s ‘point graph’ showed that a growing minority of politicians thought action would need to be taken before 2024, Fed Chairman Jerome Powell reiterated that he did not expect the central bank to raise interest rates until that year: four of 18 Fed officials anticipate a rate hike in 2022, seven of them in 2023. waiting for an increase in.
2.Central banks are starting to move
Other central banks around the world are taking action: The newspaper Nikkei reported that the Bank of Japan (BoJ) is seeking to expand the target band for Japanese government bond yields. The Norwegian central bank said it wants to start raising the base rate earlier this year, earlier than predicted.
Previously, Brazil’s central bank increased by 75bp to 2.75% on Wednesday to prevent inflation. Turkey is expected to increase in the central bank.
However, while the expectations for the Bank of England (BoE) were to protect it, the Indonesian central bank also opened fire.
3.US stocks will open mostly weak, with a decline in technology
The increase in bond yields is causing the technology to revert to its underperformance model, again hurting ‘long-term’ technology stocks – whose cash flows are in the distant future.
It dropped 1.2% while it fell 0.5%. 19 points higher.
Among the stocks that may be of interest are Tesla (NASDAQ 🙂 and banking stocks in general after the Fed delayed its decision to re-apply the Additional Leverage Ratio as a binding capital constraint from April, pointing to problems in the autopilot software with the recent accident.
Dollar General (NYSE:), Accenture (NYSE:), Nike (NYSE 🙂 and FedEx (NYSE 🙂 will share their earnings. FedEx will report under the pressure of inspections of operating conditions at its facilities.
4. Vaccine problems in Europe
In the UK’s vaccine campaign, problems arise due to delivery issues with AstraZeneca (NASDAQ 🙂 and, more pressingly, the EU’s export ban.
British Health Minister Matt Hancock warned on Tuesday that there would be a major reduction in vaccine supply. Bloomberg sources attributed these problems to problems at facilities producing pharmaceuticals for AZN in India. On the other hand, EU Commission President Ursula von der Leyen threatened to halt vaccine exports to Britain, including AZ’s.
Von der Leyen also warned that the EU is on the brink of the third wave Covid-19 outbreak. France and Poland recorded the highest number of new cases since November on Wednesday. In the Czech Republic and Italy, the infection curve becomes flat again.
5.Oil falls after stocks disappointed
Crude oil prices continued to decline after the International Energy Agency’s (IEA) monthly report sobered on supply and demand. The effect of this was intensified by a surprising increase in US crude oil weekly.
Demand concerns were intensified by increases in cases in India, particularly in Maharastra, home to more than 110 million people, halting the impressive improvement in mobility trends.
It was $ 64.32, down 0.5%, and fell 0.4% to $ 67.72.