Yields Jump To 2008 Highs Shares Plunge Into Us Fed Betting

The S&P 500 fell 2.9 percent, closing its second-worst week this year and its ninth weekly drop in 10, as fears that inflation-fighting efforts risked stifling growth grew. Shares of the technology lifted most of the weight on Friday, with the Nasdaq 100 falling more than 3%. Shares of growth from Cathie Wood’s ETF flagship to software developers and chip makers fell. A separate report showed that the consumer climate in the US fell to a record high in early June, intensifying pressure on airlines, casinos and hotels. In the government market, the two-year yields exceeded 3%, a level not seen since 2008, while the movement of short-term interest rates left the 30-year yields below those of the five-year bonds, signaling the risk that the tightening will slow down. the development. Bitcoin fell below $ 30,000, the Cboe volatility index jumped to 29 and the dollar rose. Interest rate traders increased bets on Fed increases, with three half-point increases most likely in the June, July and September policy sessions, according to market-based prices. The central bank has signaled that it is likely to raise interest rates by 50 basis points at its meeting next week. The consumer price index increased by one percent compared to the previous month and by 8.6 percent on an annual basis, exceeding all estimates. Shelters, food and gas contributed more. The so-called basic CPI, which removes the most volatile food and energy components, rose 0.6 percent from the previous month and 6 percent from a year ago, also above forecasts. “It’s straightforward,” said Dennis DeBusschere, founder of 22V Research. “Fixed bases from month to month means stricter economic conditions. Powell should sound quite aggressive next week, given the tight job market and basic CPI that did not fall from month to month. “The reaction at the front was huge compared to the long term.” Separately, the University of Michigan Preliminary Climate Index fell to 50.2 from 58.4 in May, according to data released Friday. The rate was weaker than all estimates in a Bloomberg survey of economists, which had an average forecast of 58.1. Wall Street affects inflation, interest rates and stocks

“From the Fed’s point of view, the pursuit continues and more aggressive measures are likely to be needed to cover inflation,” Charlie Ripley, senior investment strategist at Allianz Investment Management, wrote in a note. “Either that translates into more aggressive increases this summer, or a continuation of the 50 basis point increases this fall is the choice for the Fed, but the general reality for the Fed is that inflation is out of control and has been cut. for these next months “. “One of the developments we’ve seen in previous inflation readings is that the more sticky core elements are starting to catch fire – and we’ve seen it accelerate with the latest core version,” said Max Gokhman, AlphaTrAI’s chief investment officer. “This means that the Fed firefighters have to fight harder, and that means the bulls can burn.” “The CPI report is another reminder that stock markets will no longer be held back by monetary policy,” said John Lynch, chief investment officer at Comerica Wealth Management. “We are looking for volatility to continue until stock markets agree that the Fed target rate is at least 3.0 percent, and not to magnify the size of the gradual moves in the next few policy sessions.” “Today’s report should dispel any pretense that a ‘pause’ in interest rate hikes is likely to be appropriate by the end of the summer,” said Jason Pride, Glenmede’s head of private equity investment, in a note. “Investors should expect the Federal Reserve to continue raising interest rates by 50 bp next week and beyond, until inflation shows significant signs of slowing to the Fed target range of two to three percent.” .

Some of the main movements in the markets:

inventories

The S&P 500 fell 2.9% at 4 p.m. New York time The Nasdaq 100 fell 3.6%. The Dow Jones Industrial Average fell 2.7%. The MSCI World Index fell 2.8%.

currency

The Bloomberg Dollar Spot Index rose 0.8%. The euro fell 0.9 percent to $ 1.0519 The British pound fell 1.4 percent to 1.2312 US dollars The Japanese yen fell slightly to 134.38 per dollar

Links

The yield on 10-year bonds increased by 11 basis points to 3.15 percent Germany’s 10-year yield rose nine basis points to 1.52%. Britain’s 10-year yield rose 12 basis points to 2.45 percent

Goods

West Texas Intermediate crude fell 0.7% to $ 120.61 a barrel Gold futures rose 1.3% to $ 1,876.50 an ounce

title: “Yields Jump To 2008 Highs Shares Plunge Into Us Fed Betting " ShowToc: true date: “2022-12-10” author: “Claudia Chamberlin”

The S&P 500 fell 2.9 percent, closing its second-worst week this year and its ninth weekly drop in 10, as fears that inflation-fighting efforts risked stifling growth grew. Shares of the technology lifted most of the weight on Friday, with the Nasdaq 100 falling more than 3%. Shares of growth from Cathie Wood’s ETF flagship to software developers and chip makers fell. A separate report showed that the consumer climate in the US fell to a record high in early June, intensifying pressure on airlines, casinos and hotels. In the government market, the two-year yields exceeded 3%, a level not seen since 2008, while the movement of short-term interest rates left the 30-year yields below those of the five-year bonds, signaling the risk that the tightening will slow down. the development. Bitcoin fell below $ 30,000, the Cboe volatility index jumped to 29 and the dollar rose. Interest rate traders increased bets on Fed increases, with three half-point increases most likely in the June, July and September policy sessions, according to market-based prices. The central bank has signaled that it is likely to raise interest rates by 50 basis points at its meeting next week. The consumer price index increased by one percent compared to the previous month and by 8.6 percent on an annual basis, exceeding all estimates. Shelters, food and gas contributed more. The so-called basic CPI, which removes the most volatile food and energy components, rose 0.6 percent from the previous month and 6 percent from a year ago, also above forecasts. “It’s straightforward,” said Dennis DeBusschere, founder of 22V Research. “Fixed bases from month to month means stricter economic conditions. Powell should sound quite aggressive next week, given the tight job market and basic CPI that did not fall from month to month. “The reaction at the front was huge compared to the long term.” Separately, the University of Michigan Preliminary Climate Index fell to 50.2 from 58.4 in May, according to data released Friday. The rate was weaker than all estimates in a Bloomberg survey of economists, which had an average forecast of 58.1. Wall Street affects inflation, interest rates and stocks

“From the Fed’s point of view, the pursuit continues and more aggressive measures are likely to be needed to cover inflation,” Charlie Ripley, senior investment strategist at Allianz Investment Management, wrote in a note. “Either that translates into more aggressive increases this summer, or a continuation of the 50 basis point increases this fall is the choice for the Fed, but the general reality for the Fed is that inflation is out of control and has been cut. for these next months “. “One of the developments we’ve seen in previous inflation readings is that the more sticky core elements are starting to catch fire – and we’ve seen it accelerate with the latest core version,” said Max Gokhman, AlphaTrAI’s chief investment officer. “This means that the Fed firefighters have to fight harder, and that means the bulls can burn.” “The CPI report is another reminder that stock markets will no longer be held back by monetary policy,” said John Lynch, chief investment officer at Comerica Wealth Management. “We are looking for volatility to continue until stock markets agree that the Fed target rate is at least 3.0 percent, and not to magnify the size of the gradual moves in the next few policy sessions.” “Today’s report should dispel any pretense that a ‘pause’ in interest rate hikes is likely to be appropriate by the end of the summer,” said Jason Pride, Glenmede’s head of private equity investment, in a note. “Investors should expect the Federal Reserve to continue raising interest rates by 50 bp next week and beyond, until inflation shows significant signs of slowing to the Fed target range of two to three percent.” .

Some of the main movements in the markets:

inventories

The S&P 500 fell 2.9% at 4 p.m. New York time The Nasdaq 100 fell 3.6%. The Dow Jones Industrial Average fell 2.7%. The MSCI World Index fell 2.8%.

currency

The Bloomberg Dollar Spot Index rose 0.8%. The euro fell 0.9 percent to $ 1.0519 The British pound fell 1.4 percent to 1.2312 US dollars The Japanese yen fell slightly to 134.38 per dollar

Links

The yield on 10-year bonds increased by 11 basis points to 3.15 percent Germany’s 10-year yield rose nine basis points to 1.52%. Britain’s 10-year yield rose 12 basis points to 2.45 percent

Goods

West Texas Intermediate crude fell 0.7% to $ 120.61 a barrel Gold futures rose 1.3% to $ 1,876.50 an ounce