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Thursday, May 19, 2022

GLOBAL MARKETS-Wall Street stable, US bond yields hit new highs

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By Lawrence Delevingne and Saikat Chatterjee

BOSTON/LONDON, March 25 (Reuters) – Wall Street stocks mostly stabilized on Friday, following a tech-driven rally and Treasury yields hitting new highs as markets assess a world with high interest rates and the effects of Russia’s war in Ukraine.

* At 16:19 GMT, the Dow Jones Industrial Average was up 20.18 points, higher and 0.06% higher, at 34,728.13; the S&P 500 index fell 10.62 points, or 0.23%, to 4,509.54 units; and the Nasdaq Composite, about 147.54 points, or 1.04%, and 14,043.93 units.

* The MSCI World Stock Index was down 0.44% but is likely to post a second consecutive week of gains for the first time in 2022. The pan-European STOXX 600 is flat.

* Stock prices have been supported by Purchasing Managers’ Index (PMI) data for March, which showed the global economy is broadly holding up, but the longer-term economic outlook has investors cautious .

* Barclays, for example, cut its global economic growth forecast for 2022 to 3.3%, while traders raised their short bets.

* Global bond markets were still in the midst of one of their worst sell-offs in recent memory.

* Yields on 10-year Treasury notes, which have led the broader bond market sell-off, rose 13.4 basis points to 2.477%, their highest in nearly three years. Yields have risen 75 basis points in the past two weeks as traders scrambled to revise their rate hike expectations.

* Bank of America (BofA) joined a small but growing number of blue chip investment banks calling for more aggressive rate hikes amid soaring inflation data. The bank now expects two hikes of 50 basis points each at the June and July meetings, with “risks” that those expectations are brought forward to May and June, respectively.

* The dollar index was trading almost flat, but was on track to close the week higher. The euro appreciated.

* The demand for haven assets such as gold and the Swiss franc, is firm in the face of the continuation of the conflict in Ukraine.

* Moscow said it is curtailing its ambitions in Ukraine to claim territory claimed by Russian-backed separatists, while Ukrainian forces went on the offensive, retaking land on the outskirts of the capital, kyiv.

* Spot gold may rise, at $1,954 an ounce, down 0.15% on the day.

* Oil fell about 1% after reports of a missile attack and a fire at the facilities of Saudi state oil company Aramco.

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GRAPHICS: Yield Curve Inversions and Recessions https://tmsnrt.rs/3ItC9SJ

Exchange rates in the world http://tmsnrt.rs/2hzquG7

Asset performance in the year http://tmsnrt.rs/2szi3CI

Russia says first phase in Ukraine will be mostly completed, will focus on Donbas

Column of smoke rises from Jeddah port in Saudi Arabia, projectile fall reported

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(Edited in Spanish by Carlos Serrano)

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