London (Reuters)-Wednesday stocks rose, but investors disappointed Netflix (NASDAQ :)’s earnings and the war continued in Ukraine, asking how much real bond yields would rise outweighed profits ..
The STOXX index of 600 European companies rose 0.4% to 458.17 points. The MSCI National Stock Index was strong at 0.2%.
Investors have been wary of the Treasury Inflation Protection Securities (TIPS) for the first time since March 2020, when yields temporarily exceeded the negative territory on Tuesday.
Rising real yields will bring new headwinds to high-risk assets such as equities, especially the big tech companies reporting next week’s earnings.
Technology-intensive Nasdaq futures fell 0.6% and futures fell 0.3%
Michael Hewson, Chief Market Analyst at CMC Markets, said:
“The bigger question the market is currently working on is whether inflation is at its peak. If inflation is at its peak, it may be a good time to buy bonds again. So stocks There is a lot of uncertainty about the future direction. The market. “
The dollar has risen to a new 20-year peak of yen appreciation as the Bank of Japan re-enters the market to defend its ultra-low interest rate policy.
This week, the International Monetary Fund is beginning to reveal data on how the two-month-old war in Ukraine has hit the global economy.
The Federal Reserve Board will publish a “Beige Book” of economic conditions from late February to early April on Wednesday. “We expect the pace of economic activity to settle at a slightly slower pace,” said UniCredit analysts.
In Europe, German producer prices hit record highs during the war in Ukraine.
In a French bond-shaking election, President Emmanuel Macron and far-right candidate Marine Le Pen will face each other in a television debate Wednesday night. However, Macron seems to be ahead of Le Pen in a poll prior to the final round of Sunday’s elections.
Rising Asian stocks
MSCI’s widest non-Japanese Asia Pacific stock index rose 0.3%, marking the first positive session in a week.
Like other markets in the region tracking the rise on Wall Street on Tuesday, it rose 0.8%. Here, three major benchmarks, backed by some strong earnings results, recorded the best days in over a month. Nasdaq closed 2.2%.
China went against regional trends as China’s blue chips fell 1.5% after the central bank left benchmark lending rates unchanged.
In contrast, that decision helped to recover after reaching the lowest since October in early trading.
“Investors were looking for a stimulus from China, but PBOC didn’t offer it today,” Carlos Casanova said. “The market inevitably interprets it in a negative way, and the blockade is extended after April, which means that the worst month of economic data is in front of us.”
Yields on high-priced 10-year Treasury bonds in China fell earlier this month for the first time since 2010, with China’s 10-year yields at around 2.85%.
Benchmark 10-year Treasury yields on Wednesday were within 3% whiskers, but remained largely unchanged on the day.
Yield differentials are also a factor for Japan, and the central bank proposed on Wednesday to buy an unlimited 10-year government bond (JGB) at 0.25% in its third move since February to meet yield targets. bottom.
With this yield curve control, the yen hit a 20-year low against the dollar, but Wednesday’s dollar was nervous that intervention from Japanese authorities could bounce back orally or otherwise. So it fell 0.2% against the yen.
Oil prices recovered from the sharp decline in the previous session, as concerns over tight supply from Russia and Libya dominated.
Futures rose 1.2% to $ 108.55 a barrel.
It fell by a minimum of 0.4% in a week, which was reduced by higher yields.
Netflix disappointed Reuters with rising stocks up to real yield rise
https://www.investing.com/news/economy/stocks-wobble-as-china-lockdowns-drag-yen-wallows-2806523 Netflix disappointed Reuters with rising stocks up to real yield rise