Jakarta, CNBC Indonesia – The United States (US) stock market weakened at the opening of trading Monday (24/1/2022) amid investor anticipation for the release of issuers’ financial reports and monetary policy from the US central bank (Federal Reserve/The Fed).
The Dow Jones Industrial Average fell 600 points (-1.8%) at 08:30 local time (21:30 WIB) and within 30 minutes to minus 680.96 points (-1.99%) to 33,584.41. S&P 500 drops 103.83 points (-2.36%) to 4,294.11 and Nasdaq drops 360.34 points (-2,62%) ke 13.408,58.
The S&P 500 index is down more than 9% so far this month, closing in on its worst January correction in history. Issuer index blue chip, The Dow Jones is nearing its worst level since March 2020 when it fell 7%, while the Nasdaq plunged more than 14% to become its worst since October 2008 (when it fell to 17.7%).
The CBOE Volatility Index, or often called the market anxiety index, touched its highest level in the past year, reaching the level of 35.84, amid the release of the fourth quarter of 2021 financial reports. mixed.
So far, more than 74% of the S&P 500 index constituents have released financial performances that exceed market estimates. However, two companies have disappointed market participants last week, among them Goldman Sachs and Netflix.
Investors monitor financial reports from ‘Big Tech’ companies including Microsoft, Tesla, and Apple. The shares of the three opened collapsed, respectively by 1.5%, 6.8%, and 1.7%.
Another sentiment came from the Fed’s meeting on monetary policy which will be announced on Wednesday (26/1/2022) local time. Investors are worried about how many times interest rates will be raised by the Fed this year and when the hikes will start.
Goldman Sachs projects a fourfold increase this year. However, the investment bank sees a risk that interest rate hikes will be more than that due to a spike in inflation.
Investors shed riskier stocks this year amid predictions that the Fed will tighten monetary policy. Bitcoin plunged more than 8% last week to $35,511/BTC, erasing nearly half of the value it hit in November.
Yield (yield) US government bonds last week fell to 1.76%. The yield, which is the market’s reference, had strengthened earlier this year ahead of the Fed’s benchmark interest rate hike and more or less triggered a massive sell-off in technology stocks.
“The big narrative this year is the drastic rise in benchmark interest rates, forcing investors to re-valuate some expensive sectors and switch to value-based stocks. [value stock],” said David Lefkowitz, Head of Equity at UBS Global Wealth Management in America CNBC International.
CNBC INDONESIA RESEARCH TEAM