In the US stock market on the 21st, the market rebounded led by large tech stocks. But fears are growing that US Treasury yields have risen in the days ahead of Federal Reserve Chairman Jerome Powell’s speech.
S&P 500 Index 4399.7730.060.69% Dow Jones Industrial Average 34463.69-36.97-0.11% Nasdaq Composite Index 13497.59206.811.56%
The S&P 500 Index starts the new week in positive territory. Until last week, it had fallen for three consecutive weeks on a weekly basis. The Nasdaq 100 index rose more than 1%. Tesla rose for the first time in seven trading days. Semiconductor maker Nvidia, which sparked the artificial intelligence (AI) boom that has driven stocks soaring this year, is up more than 8%. The company is expected to report a 65% year-over-year revenue increase in its earnings on Tuesday, according to data compiled by Bloomberg.
“This is a big week for tech stocks, and there is widespread optimism that Nvidia will report some good results,” said Edward Moya, senior market analyst for the Americas at Oanda. But if real yields continue to rise, stocks will be in a “bad spot,” he added.
Fed Chairman Jerome Powell is set to speak at the Kansas City Fed’s annual symposium in Jackson Hole, Wyoming, on Wednesday, attracting investors’ attention. Minutes of July’s Federal Open Market Committee (FOMC) meeting released last week showed that most officials were concerned that inflation might not slow down, and continued rate hikes could be necessary.
“Traders will look to every word of Powell’s speech at Jackson Hole this week for clues to what the Fed is thinking,” said Chris Larkin, managing director of Morgan Stanley’s E*Trade Financial. pointing out. “There will be some investors focused on the reality that the strength of the economy could prolong the Fed’s stance of higher interest rates for longer,” he explained.
Of the 602 people who responded to the latest Bloomberg Markets Live (MLIV) Pulse survey, two-thirds said the Fed had failed to bring inflation under control. And over 80% of respondents expect Powell’s speech to emphasize a hawkish message.
The Fed’s speeches at Jackson Hole have often boosted stock prices since the turn of the century. The S&P 500 rose an average of 0.4% over the next week, according to data compiled by Bloomberg Intelligence.
But last year, still fresh in traders’ minds, stocks fell 3.2% in the week following the chairman’s speech. Mr. Powell has vowed to keep tightening policy until the fight against inflation is done.
Morgan Stanley, Goldman Sachs disagree with mood for U.S. stocks worsening
In terms of individual stocks, shares of Palo Alto Networks Inc., which provides network security solutions, surged after forecasting higher-than-expected annual bills on Wall Street. Britain’s competition authority has approved a $61 billion acquisition of cloud computing firm VMware by chip maker Broadcom. Electric car (EV) Nikola plunged. It warned that it may not be able to achieve its annual delivery target due to the recent battery fire.
US Treasuries
Selling resumed in the Treasury market, pushing 10-year Treasury yields to their highest level in 16 years. With the economy showing persistent resilience, investors are adjusting their positions as interest rates will remain high even after rate hikes end.
JGB latest price vs. previous business day (bp) rate of change US 30-year bond yield 4.45% 7.31.68% US 10-year bond yield 4.34% 8.31.96% US 2-year bond yield 5.00% 6.01.22% US Eastern Time 16:00 50 minutes
Yields on 10-year inflation-protected government bonds (TIPS) also rose, surpassing 2% for the first time since 2009. Yields on 10-year Treasuries also rose above their October peak, to levels not seen since late 2007.
Selling was concentrated in long-term bonds, and the yield curve steepened. In the swap rate market, expectations for next year’s rate cut continue to recede, while the premium for this year’s rate hike has risen slightly.
Bond markets expect Powell’s speech to take on a hawkish tone.
“Technical analysis is bearish on fixed income,” said Andrew Brenner, head of international fixed income at NatAlliance Securities. However, he said: “August is a slow month and liquidity is low during the holiday week. The world expects Powell to take a hawkish view and has nothing to fear.”
money order
Against the background of rising 10-year bond yields, the dollar index has no sense of direction. Investor interest shifted to Powell’s speech on the 25th.
Bloomberg Dollar Index 1239.88-0.65-0.05%USD/JPY¥146.21¥0.820.56%EUR/USD$1.0895$0.00220.20% 4:50pm ET
The Bloomberg Dollar Index rose for five consecutive weeks on a weekly basis until last week. All major currencies other than the yen rose against the dollar on this day. The Swiss franc, the Swedish krona and the Norwegian krone were especially bought.
Win Singh, global head of currency strategy at Brown Brothers Harriman, said higher yields are a strong tailwind for the dollar. Fed Chairman Jerome Powell said the “possibility of sending a dovish message at the Jackson Hole meeting” could hurt the dollar in the short term.
The yen could test 150 yen to the dollar, saying, “It may be a few weeks away, but we’ll get there.”
“Powell’s speech may be a little more nuanced than the hawkish FOMC minutes released last week,” Sean Osborne, chief FX strategist at Scotiabank, wrote in a note.
“Markets may lean towards reducing some dollar exposure ahead of Jackson Hole in case Powell reverses some of his inflation rhetoric,” he said.
crude
New York crude oil futures fell for the first time in three business days. In addition to awareness of the possibility of an increase in crude oil supply, concerns spread over a slowdown in China’s economic growth.
West Texas Intermediate (WTI) futures closed below $81 a barrel. Iraqi Oil Minister Abdulghani will hold talks on resuming oil exports through Turkey’s Seyhan terminal, Reuters reported on Monday. Sentiment was also weighed down by reports that Iranian crude oil exports surged in August.
Meanwhile, the market also continues to focus on China’s economic slowdown, which has contributed to the recent decline. The People’s Bank of China (PBOC) announced on Thursday that the one-year loan prime rate (LPR) for August was set at 3.45%. The five-year LPR remained unchanged at 4.20%, down 10 basis points from July’s 3.55%.
China to keep 5-year LPRs linked to mortgages – voices “incomprehensible” (2)
“WTI will continue to test $80 on the downside until interest rates calm down or China provides more aggressive stimulus,” said Rebecca Babin, senior energy trader at CIBC Private Wealth. analysis. “As you can see from the spreads, tightening conditions in the market are pretty priced at the moment. Now the macro is in the spotlight again and the focus is on rates and China,” she said. .
WTI futures for September delivery on the New York Mercantile Exchange (NYMEX) fell 53 cents (0.7%) to $80.72 a barrel from last weekend. London ICE North Sea Brent October delivery fell 34 cents to $84.46.
Money
New York gold prices rise. The market will focus on the Kansas City Fed’s annual symposium in Jackson Hole this week.
Anna Wong of Bloomberg Economics said she expects a “more balanced tone” for Fed Chair Jerome Powell’s speech scheduled for Wednesday. “It signals the end of the tightening cycle, emphasizing the need to keep policy rates high for an extended period of time,” she said.
Gold spot prices rose 0.3% to $1,894.69 an ounce as of 2:40 p.m. New York time. December gold futures on the New York Mercantile Exchange (COMEX) rose $6.50, or 0.3%, to close at $1,923.
Original title:Tech Storms Back as Nvidia’s 8% Jump Fuels AI Bets: Markets Wrap(excerpt)
Treasuries Slide as Curve Steepens; Rate Cut Pricing Erodes More（抜粋）
Dollar Steady, US Yields Spike Before Jackson Hole: Inside G-10（抜粋）
Oil Falls in Thin Summer Trading on Signs of Rebounding Supply(excerpt)
Gold Declines and Copper Rises Ahead of Jackson Hole Symposium（抜粋）
2023-08-21 20:51:00
#U.S #marketHightech #buying #NVIDIA #rises #sharply #due #fever #dollar #yen #level
