@AlliesFin
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US Markets in Detail...
Sensex:60,078: +29: +0.05%
Nifty: 17,855: +2: +0.01%
Dow: 34,869: +71: +0.21%
S&P: 4,443 (-12) (-0.28%)
Nas: 14,970 (-78) (-0.52%)
Brazil: 113,583: +300: +0.27%
Ftse: 7,063: +12: +0.17%
Dax: 15,574: +42: +0.27%
Cac: 6,651: +12: +0.19%
WTI Oil: $75.45: +1.99%
Brnt: $79.33: +1.59%
Gold: $1,752: flat
Silver: $22.69: +1.20%
Copper: $429: flat
Eur-$: 1.1698
GBP-$: 1.3703
Jpy-$: 110.99
Re: 73.8400: +0.20%
US10yr: 1.49%
GIND10YR: 6.209: +0.45%
$ Index: 93.4050: +0.08%
Vix: 18.76: +5.69%
BalticDry: 4,644 (-7) (-0.15%)
ADR/GDR
Cogni: +0.53%
Infy (-3.29%)
Wit (-4.59%)
IciciBk: +1.59%
HdfcBk: +1.07%
DrRdy (-0.32%)
TataMo: +4.63%
Vedanta (-2.75%)
TatSt (-0.85%)
Axis (%)
SBI: +1.33%
RIGD: +2.39%
INDA (-0.02%) (IShares MSCI INDIA ETF)
INDY: +0.36% (IShares MSCI INDIA 50 ETF)
EPI: +0.27% (Wisdom Tree India Earning)
PIN (-0.45%) (Invesco India Etf)
*Dow books 4-day winning streak, but S&P 500, Nasdaq end lower as tech shares stumble. Bond Yield Spike Spurs Growth-Into-Value Rotation. As Treasury yields pushed higher after a hawkish tilt from the Federal Reserve last week, some of the world’s largest technology companies continued to sell off. U.S. government borrowing costs advanced for a sixth week on Monday, hurting tech stocks as investors bet on rising interest rates, while three-year high oil prices ignited the energy sector.*
*A slide in bonds sent the rate on the benchmark 10-year note briefly above 1.5% -- a level not seen since June. That’s prompted the tech-heavy Nasdaq 100 to underperform major equity benchmarks. Meantime, economically sensitive companies -- like energy, financial and smaller firms -- advanced.*
*Traders pulled forward wagers on a rate hike after Fed Chair Jerome Powell said the central bank could start tapering its asset purchases in November, while officials updated their forecasts -- with half of them seeing tightening by the end of 2022. A spike in Treasury yields has added to concerns about lofty equity valuations, particularly in the tech industry, which has powered the bull-market rally.*
Yields are rising sharply, reflecting investors’ expectations about monetary tightening amid surging inflationary pressures. If yields climb higher, this could weigh especially on the overstretched growth stocks in the technology sector, which have low dividend yields. Investors might prefer the relative safety of government debt and fixed-coupon payments -- rather than buying severely overvalued stocks -- just as the Fed starts to reduce the pace of its stimulus program.
*Fed Governor Lael Brainard said the labor market may soon meet her yardstick for scaling back asset purchases, while the Covid-19 delta variant could raise upside risks for inflation. New York Fed President John Williams noted that moderating bond-buying may soon be warranted, and his Chicago counterpart Charles Evans said he sees “a first move” on raising rates in 2023.*
“We believe that these [bond market] moves have provided the spark for another ‘Value Rip’ across equity markets. In our view, the direction of longer-term interest rates should remain the #1 driver of market returns, sector rotation & thematic performance in the weeks ahead,” Chris Senyek of Wolfe Research said in a note to clients.
*An easing in Sino-U.S. tensions and Chinese authorities’ decision to pump in more cash to offset the fallout from real estate firm Evergrande’s woes offered encouragement to investors. There was also relief that Germany’s election outcome ruled out a pure left-wing coalition government.*
Technology stocks are higher valuation, meaning you’re paying for future growth, and higher interest rates are a brake on future growth. When yields rise, tech shares tend to underperform. Tech stocks are seen as sensitive to rising yields because increased debt costs can hinder their growth and higher rates can make their future cash flows appear less valuable.
By: via @AlliesFin Serve Stock Market
