LAST UPDATE: 14.00
Futures on Wall Street are losing ground, with the tech industry under strong pressure from the rise of US government bonds, which jumped to the highest level since February 2020.
In particular, before the first meeting of the week, after the stock markets and bonds in the US were closed yesterday due to the celebration of Martin Luther King’s Day, Nasdaq technology futures fall by 2% or about 300 points as bond yields skyrocket. The 10 years US government bond adds 4 basis points to 1.81% (while earlier it reached 1.885%) and the 2 years amplified by 9 basis points at 1.04%. The 2-year yield has strengthened by 30 basis points since the beginning of the year, and is heading for the largest monthly increase since December 2009.
Both bonds have arrived at highs of about 2 years, from the beginning of 2020, before the start of the pandemic.
The futures of S&P lose 1.22%, while his Dow Jones decline by 0.8%.
In pre-conference transactions the shares of technology giants record the largest losses. Intel fell 1.27%, Apple lost 1.64% and Tesla slipped 2.54%.
The Bank of America Global Survey of Fund Managers in January showed that the net distribution in technology fell by 20% compared to the previous month to 1%, the lowest level since 2008, although they expect inflation to fall this year and bet on the rise of both commodities and stocks as a whole.
“It seems likely that the Fed will want to act a little more aggressively in the early stages of tightening its monetary policy,” said Eugene Leow, an analyst at DBS Bank in Singapore.
“Such a thing could mean the end of quantitative easing in January, instead of waiting until March,” he added.
“Everyone is convinced that the Fed will move fast, and when we talk about the 10-year bond, it does not matter if it will be January or March that will raise interest rates,” said Philip Brown, an analyst at the Commonwealth Bank of Australia.
At the same time in Europe, the technology sector is also under pressure, recording losses of 2.5%, with European stock markets losing 1.4%.
In oil market Brent is expanding its profits to the highest level in seven years, as geopolitical tensions in the Middle East eased and concerns about Omicron’s impact on demand. Brent is up 1.5% at $ 87.75 a barrel, the highest level since August 2014.
West Texas Intermediate also rose above $ 85 a barrel for the first time since October.
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