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Wall Street shares reopened Tuesday after a global financial crisis in the previous quarter led by US Federal Reserve expectations for a rise in interest rates.
The blue-chip index S&P 500 fell 0.4% in early New York, while its intellectual property index lost 0.7%. The tech-heavy Nasdaq Composite gauge dropped by 0.4 percent.
The Nasdaq was on Monday briefly fell into the control section while traders fled the technical highs, before closing the day by 0.1 percent.
The European share index of the Stoxx 600, which like other global markets is affected by US monetary policy that supports corporate lending and shares accounting globally, added 0.8 percent Tuesday. The European rate dropped by 1.5 percent on Monday, at its worst daily performance since November.
Following much of U.S. activity last week, as well as inflation figures ahead of Wednesday that economists surveyed by Reuters expect to show U.S. consumer prices rose by 7 percent a year until December, markets fell sharply with the Fed’s first rise during the epidemic. by March. Goldman Sachs, an investment bank, expects four US prices to increase this year.
“All of the Fed here has nothing to do with it,” said Hani Redha, history manager of PineBridge Investments.
The US Central Bank, which began purchasing about $ 120bn of assets and debt security securities in March 2020 to reduce lending and blockade markets due to the coronavirus crisis, has already reduced its purchases. preparation for reduction its $ 9tn.
The gradual reduction, says Redha, “puts investors at risk,” by raising prices and lowering their earnings on bonds, “so you go to companies and enter the imaginary positions as unprofitable technical companies”.
“Now all that goes backwards as it slows down and takes a lot of money off of the machines.”
But Anatole Kaletsky, an expert on housing research Gavekal, said it made sense to “buy a dip” following the Nasdaq direction. “Prices are on the rise, and in any case they are not as bad as they seem,” he said. “The risks of the annual inflation that everyone complains about are misleading because they involve a lot of compensation for the fall in the first year of the epidemic.”
“Governments and central banks have the obvious impetus for lowering lending rates,” he added, given the high level of government and corporate debt that has risen during the low interest rate.
The 10-year benchmark yield on the US Treasury note was nearly 1.77 percent, trading above 1.8 percent on Monday. Yields over the two-year Treasury note, which adheres closely to expected lending, increased 0.03 per cent to about 0.94 per cent.
Government bond prices tend to fall in line with expectations of rising interest rates and rising prices, which reduce real returns from fixed payment security. German Bund’s 10-year yields were based on 0.03 percent.
In Asia, Hong Kong’s Hang Seng share index closed and the Tokkei 225 of Tokyo fell 0.9%. Brent crude, a power sign, added 1.6 percent to $ 82.19 a barrel.
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