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US stocks rise and bonds drop as traders weigh economic outlook

US stocks rose on Tuesday as the government debt was sold after the International Monetary Fund warned that the Ukrainian war would knock growth and simultaneously boost inflation.

The high-tech Nasdaq Composite rose 1.7 percent, while Wall Street’s broad stock index, the S&P 500, rose 1.3 percent, led by consumer stocks. The only S&P sub-sector in the red on Tuesday was energy, as Brent crude, the international oil index, fell 4.7%.

“The decline in oil prices after a four-day rise appears to be the main driver of US stock market strength today,” said Christopher Murphy, co-head of the Susquehanna Group’s derivatives strategy.

The move in U.S. stocks came despite the IMF’s announcement on Tuesday Cut its global growth forecast For 2022 to 3.6 percent, down 0.8 percentage points since January’s forecasts, saying “global economic prospects have fallen sharply, mainly due to Russia’s invasion of Ukraine.”

The regional Stoxx 600 meter in Europe closed down 0.8 percent. The German Xetra Dax lost 0.1% and the London FTSE 100 index fell 0.2%.

Eurozone bonds were also hit hard. International Monetary Fund said Countries importing goods in Europe will be more affected than the US by the increases in fuel and food prices caused by the conflict.

“Europe is in a more precarious position than the United States,” said Mary Nicola, multiple portfolio manager at PineBridge. “We are seeing effects on sentiment and economic activity that are not going to go away.”

The yield on the German bond for 10 years rose by 0.07 percentage points to 0.91% – after reaching its highest level since July 2015 – because the prospect of continued inflation in the eurozone slowed down the attraction of fixed income bond payments and raised expectations The European Central Bank will raise interest rates.

“There is more concern about inflation in Europe, and expectations of raising the ECB’s interest rates are brewing,” said Brian Nick, chief investment strategist at Nubeen.

The U.S. Treasury Department also came under pressure, with the yield on the biennial policy-sensitive note adding 0.12 percentage points to 2.56 percent, which was raised by expectations of Fed policy. , Which say a jumbo jumbo interest rate rise of 0.75 percentage points may come at some point this year.At the end of the longer period, the yield on the 30-year treasury bill has risen above 3% for the first time since 2019.

The moves came as traders waited for a speech on Thursday by Federal Reserve Chairman Jay Powell, which may suggest signs of the aggressiveness with which the US Federal Reserve will raise interest rates this year after Annual rate Consumer price growth reached 8.5 percent in March.

Investors are looking ahead to a week of U.S. corporate profits to get clues as to how the business world is coping with inflation and the ambiguous growth forecast. Unsubscribe By UK households to cope with rising cost of living will be replicated elsewhere.

The price of gold, which has reached its own Highest point In a month on Monday, as fears of economic growth pushed investors to purchase the safe haven property fell 1.2 percent to $ 1,954 an ounce.

In Asia, Hong Kong’s Hong Kong stock index fell 2.3 percent after Chinese regulators banned the lucrative business of broadcasting unauthorized video games.

US stocks rise and bonds drop as traders weigh economic outlook Source link US stocks rise and bonds drop as traders weigh economic outlook

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