Monday, January 24, 2022

Big Tech Takes Down US Stocks During Dollar Falls: Market Wrap

(Bloomberg) — Technology companies dragged US stocks down, overshadowing a report suggesting cooler inflation prospects. The dollar fell along with bond yields.

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The Nasdaq 100 outperformed key benchmarks by at least 2.5%, with megacaps such as Tesla Inc. and Microsoft Corp. Chipmakers erased gains that were previously driven by strong growth projections from Taiwan Semiconductor Manufacturing Co. Boeing Co rallied after a Bloomberg News report said the 737 MAX is set to resume commercial flights in China as soon as this month.

Federal Reserve Governor Lyle Brainard said the central bank could raise interest rates in early March to ensure that production-high price pressures are brought under control. “The committee anticipates several increases during the year,” she said in response to a question during her confirmation hearing before the Senate Banking Committee on Thursday. Prices paid to US producers declined in December, representing a respite from a recent massive upward trend.

“We are in a position where while for equities has been positive, maybe neutral or negative, and there are still some options, this prepares the equity market for more volatility over the next few months as we see That’s how the data shake out and how the Fed reacts,” said Sarah Hunt, portfolio manager at Alpine Woods Capital Investors.

READ: US initial jobless claims hit highest level since mid-November

Morgan Stanley clients expect financial stocks to outperform this year, according to a survey at its annual conference this week. The survey shows that 45% of the respondents bet that the industry will perform best in 2022. This is the highest share of votes for the region since 2015, the firm said in a note on Thursday.

Mortgage rates in the US rose for the third week in a row, reaching the highest point in nearly two years. 30-year loans averaged 3.45%, up from 3.22% last week and the highest since March 2020, Freddie Mac said in a statement on Thursday.

Some of the major events of this week are as follows:

  • Bank of Korea policy decision and briefing on Friday.

  • Wells Fargo, Citigroup, JPMorgan due to report earnings on Friday.

  • US business inventory, industrial production, University of Michigan consumer sentiment, retail sales on Friday.

  • New York Fed Chairman John Williams speaks on Friday.

For more market analysis, read our MLIV blog.

Some of the main moves in the markets:

shares

  • The S&P 500 fell 0.7% as of 1:13 p.m. New York time

  • Nasdaq 100 dropped 1.5%

  • The Dow Jones Industrial Average was slightly changed

  • MSCI World Index down 0.4%

currencies

  • Bloomberg Dollar Spot Index fell 0.1%

  • The euro rose 0.2% to $1.1464

  • The British Pound rose 0.1% to $1.3716

  • The Japanese yen rose 0.5% to 114.12 per dollar

bond

  • Yield on 10-year Treasuries fell two basis points to 1.72%

  • Germany’s 10-year yield fell three basis points to -0.09%

  • Britain’s 10-year yield fell three basis points to 1.11%

Goods

  • West Texas Intermediate crude fell 0.3% to $82.37 a barrel

  • Gold futures fell 0.4% to $1,820.10 an ounce

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