Jakarta, CNBC Indonesia – United States (US) stock market crash at the opening of trading Tuesday (18/1/2022), in the midst of the issuer’s slipping financial performance and a surge in yields (yield) US government bonds.
The Dow Jones Industrial Average fell 520 points (-1.47%) at 08:30 local time (21:30 WIB) and within 30 minutes to 555.44 points (-1.55%) to 35,356.37 and the S&P 500 fell 67.35 points (-1.44%) to 4,595.5 and the Nasdaq fell 237.5 points (-1.59%) to 14,656.26.
Yield US bonds rose rapidly. If you look at the performance data for this 2 years, yield rose more than 1% for the first time since February 2020. Whereas in the previous month, the pandemic situation had pushed the US economy into a recession zone.
Yield the 2-year period is used as a reference in which the US central bank (Federal Reserve / The Fed) will determine the percentage of short-term benchmark interest rates. The benchmark interest rate rises along with yield bonds, where is the reference yield The US government’s 10-year tenor has touched 1.85%, the highest reading since January 2020.
This short trading week will be decorated by the fourth quarter of 2021 financial reports from 35 companies that are constituents of the S&P 500 index, including Bank of America and Netflix. Goldman Sachs is also scheduled to release financial reports.
Goldman Sachs shares opened 8% lower after the release of its financial performance that did not match market expectations following a surge in operating expenses to 23%. Overall, 26 companies from the S&P 500 index have released their financial results for the fourth quarter of 2021. At least 77% of their performance was recorded below the expectations of market analysts.
“Overall, the economic performance in the fourth quarter of 2021 was positive, in line with the issuer’s profit and revenue growth,” said Mark Haefele, Chief Investment Officer (CIO) of USB Global Wealth Management in a research report quoted CNBC International.
Tesla shares tumbled 2.5%, Meta Platforms (Facebook’s parent company) dropped 3.7%, while Amazon tumbled 2.5%. Microsoft shares fell 2.5 percent after the company announced plans to acquire game developer Activision Blizzard for US$ 68.7 billion. Activision shares opened up 30%.
He also added that the company’s projected performance is likely to show continued demand strength in 2022 despite the deployment of Omicron disrupting some sectors.
The spread of the Omicron variant raises the question of whether the global economy will improve since the news of the Omicron discovery was released. Some countries and regions are re-implementing lockdown and restrictions on social activities to suppress the spread of Covid-19.
However, recent data indicate the spread will decline. In the US, the latest case data showed a 7-day decline since hitting a record this month, according to data from Johns Hopkins University research. In Maryland, the daily transmission rate also fell by 27% on a weekly basis. New cases also fell in South Africa and the UK.
CNBC INDONESIA RESEARCH TEAM
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