The US stock market resumed its rise on the 17th. Investors were leaning toward the end of tightening U.S. monetary policy as data showed China’s economy was slowing.
S&P 500 Stock Index 4522.7917.370.39% Dow Jones Industrial Average 34585.3576.320.22% Nasdaq Composite Index 14244.95131.250.93%
Activision Blizzard shares rose. Regarding Microsoft’s planned $69 billion (approximately 9.59 trillion yen) acquisition of Activision, a lawyer for the British competition authority said, “productive“We had a conversation,” he said. Ford Motor is down. The electric vehicle (EV) model of the popular pickup truck “F150” will be reduced by up to 17%. China’s economy grew slower than expected in the second quarter, raising the risk of spillovers to the global economy.
US Treasury Secretary Yellen said in an interview with Bloomberg Television, “Many countries rely on strong Chinese growth to propel their economies, especially in Asia. It can have a negative impact,” he said. In the United States, he said, “although growth has slowed, the labor market remains reasonably strong. We do not expect a recession.”
There was a theory that even if interest rates rise in the United States and Europe, personal consumption in China, which has been released from lockdown due to the coronavirus pandemic, will drive the global economy, but this view is losing its persuasiveness with each passing day. .
Video: Bloomberg Television
Source: Bloomberg
Yellen said she believed the United States was on a “favorable trajectory” of lowering inflation without a significant softening in the labor market.
In financial markets last week, stocks and bonds rallied after data showed easing inflationary pressures.
“The biggest problem is economic growth, and inflation has dropped to number two,” said Scott Radner, chief investment officer at Horizon Investments. and explained. “When small caps outperform the large caps and the Nasdaq, more people switch to the view that economic growth is fine,” he continued.
Citigroup U.S. Corporate Earnings Adjusted Index
Source: Bloomberg
The next point for the market is corporate earnings. S&P 500 companies are expected to report a 9% decline in earnings in the second quarter, according to data compiled by Bloomberg Intelligence. If all goes as expected, it will be the worst slump since 2020.
“A sprinting bull could get tripped up by cracks in the economy and corporate earnings,” said Saira Malik, chief investment officer at Nuveen. “If the S&P 500 earnings are the benchmark, analysts continue to revise down their forecasts for both the second quarter and the full year,” he said.
US Treasuries
U.S. Treasuries rose. Five-year bonds were particularly bought, with yields dropping about 3 basis points (bp, 1 bp = 0.01%). With officials refraining from public statements ahead of the Federal Open Market Committee (FOMC) meeting on June 25-26, the market has been tepid.
JGB latest price vs. previous business day (bp) rate of change US 30-year bond yield 3.93%0.40.09% US 10-year bond yield 3.81%-2.2-0.56% US 2-year bond yield 4.74%-2.1-0.44% US Eastern Time 16:35
The 10-year bond yield range is 3.77-3.83%. It outperformed German government bonds and British bonds of the same maturity. The boom in medium-term bonds has pushed butterfly spreads on 2-5-30-year bonds down by about 4 basis points.
In the morning, 2-year note futures were bought in bulk, which supported short-term notes, but overall the trading was quiet.
foreign exchange
In the foreign exchange market, the dollar is trading in a narrow range against the major 10 currencies. The Bloomberg dollar index erased the morning gains and turned downward. Rising stock prices and falling U.S. Treasury yields are behind this. A weaker-than-expected Chinese GDP led to a tight sell-off against the Australian and New Zealand dollars. On the other hand, some new buying also took place in response to volatility in major currencies.
Bloomberg Dollar Index 1201.94-0.73-0.06%USD/JPY¥138.72-¥0.08-0.06%EUR/USD$1.1239$0.00110.10% 16:35 US Eastern Time
The Bloomberg Dollar Index rose 0.3% at one point. The New York Fed’s manufacturing business index in July fell from the previous month, barely remaining in the expansion zone. Inflationary pressures have receded.
The dollar’s exchange rate against the yen was unstable, but remained almost unchanged from the previous business day. The yen remains strong since the beginning of the month, up about 4%.
Net yen shorts by leveraged funds increased by 3,582 contracts to 58,099 contracts, according to open interest data for the week ended July 11, released by the Commodity Futures Trading Commission (CFTC). It was the highest level since May last year.
The euro rose to $1.1249 against the dollar, its highest since February 25.
crude
New York crude oil futures continue to fall. Disappointing economic data from China and the resumption of production at a large Libyan oil field weighed on the market.
Protesters at the Shalala oil field, one of Libya’s largest oil fields, left the field and production resumed. China’s April-June growth fell short of market expectations.
West Texas Intermediate (WTI) futures on the New York Mercantile Exchange (NYMEX) for August contract closed at $74.15 a barrel, down $1.27 (1.7%) from the previous weekend. It closed at the lowest price in a week. London ICE’s North Sea Brent September contract fell $1.37, or 1.7 percent, to $78.50.
Money
The New York gold futures market fell. Last week saw its biggest weekly gain since April.
Traders will be watching to see if the Fed will continue to raise rates after the Federal Open Market Committee (FOMC) meeting in July. If interest rates continue to rise, the attractiveness of non-interest-bearing gold will decline.
U.S. retail sales data for June, due out on Wednesday, will give an idea of how consumer spending is holding up amid tightening monetary policy.
Commodity futures for August contract on the New York Mercantile Exchange (COMEX) closed at $1,956.40 an ounce, down $8, or 0.4%, from the previous weekend.
Original title:Stocks Climb After Yellen Eases Recession Fears: Markets Wrap(excerpt)
Treasuries Gain, Led by Belly of the Curve; Stocks Push Higher（抜粋）
Dollar Fluctuates as Aussie, Kiwi Drop on China GDP: Inside G-10（抜粋）
Oil Drops as Libya’s Production Returns, China’s GDP Disappoints(excerpt)
Gold Slips as Traders Await More Data on Fed Interest-Rate Path（抜粋）
2023-07-17 20:38:00
#Stocks #Rise #Recession #Fears #Ease #Yellen #Remarks
