The NASDAQ market showed great volatility on the 25th following the 22nd and 23rd following the rapid rise in government bond yields. The photo shows the Nasdaq Market site building near Times Square in New York on the 23rd (local time). [박용범 특파원]– As the US Treasury bond rate soared in anticipation of an economic recovery, major technology stocks collapsed on the 25th (hereinafter referred to as the Eastern Time of the United States), and the New York Stock Market became a frost. The NASDAQ index fell 3.52% on the same day. This is the largest decline since October 28 last year.
The S&P 500 Index and the Dow Jones Index fell 2.45% and 1.75%, respectively. All three indexes fell sharply.
The NASDAQ index continued to fall as the US Treasury bond rate rose as if the ceiling was pierced. In particular, large tech stocks showed a collapse. The Nasdaq Index, which closed at 13,597.97 the previous day, recovered from 1 p.m. and then began to slip again, closing at 13,119.43.
Tesla fell 8.06% on the day to close at $682.22. It is the lowest since December 30 last year. It means that all of the share price gains this year have been blown.
The Nasdaq index fell sharply as large tech stocks that led the bull market after the pandemic such as Apple (-3.48%), Alphabet (-3.26%), Amazon (-3.24%) and Microsoft (-2.37%) fell relatively sharply.
Economically sensitive stocks, which rose when technology stocks fell, couldn’t keep pace on this day. Airline and travel stocks such as Boeing (-5.62%), American Airlines (-4.40%), Hilton (-3.36%), Expedia (-3.44%), and Delta Airlines (-2.69%) declined on the same day.
On this day, the 10-year government bond rate rose to 1.556% in the afternoon. As of 4 PM, it is recording 1.529%. The 10-year Treasury bond rate, which ended trading at 1.38% the day before, rose sharply to the point of an intraday increase of 0.18 percentage points.
The 30-year government bond rate also fluctuated. The 30-year interest rate, which closed at 2.24% the day before, increased to 2.354% on the afternoon of the day. As of 4 pm, it is recording 2.296%.
On the 24th, Jerome Powell, chairman of the Federal Reserve System of the United States (Fed), announced that there will be no interest rate hike for three years, but the weakening has not gone a day. Chairman Powell continued to send messages that there was no premature taper (cutting liquidity supply), but the market did not believe in Chairman Powell. Chairman Powell raised the level of remarks the day before, but as the rapid rise in interest rates reappeared, the market’s anxiety is growing.
Investors are seeing that if the economic recovery progresses faster than expected, the Fed will belatedly start an exit strategy. This is because the trauma of the `austerity attack` experienced in the process of overcoming the global financial crisis remains strong.
Unlike the financial crisis caused by the insolvency of the financial system, this crisis is caused by a virus, so the prospect that the economy will recover faster if collective immunity is established is also making investors uneasy. Societe Generale investment strategist Albert Edwards said, “There is a growing risk that many of the Fed’s growing bubbles will soon burst.”
The fact that the U.S.’s provisional GDP growth rate for the fourth quarter of last year was 4.1%, which is higher than the breaking news (4.0%, compared to the previous year, annualized), also affected the rise in government bond rates. Gamestop, which attracted attention due to the CFO change, rose sharply until 2 p.m. even in the bearish market on this day, then fell again and ended the deal with an increase of 18.56%.
On the other hand, the bitcoin price, which recovered from the $50,000 range this morning, has declined after 8 am, trading at the $49,000 range as of 4 pm.
[뉴욕 = 박용범 특파원]
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