July 2, 2022

U.S. stocks opened lower after the Hawkeye Powell comments, and bond yields remained stable

U.S. stocks fell and the sale of government bonds was confirmed on Friday, following recent signs that the Federal Reserve will tighten monetary policy to combat inflation.

The S&P 500 fell 0.3% after opening, while the technology-heavy Nasdaq Composite fell less than 0.1%. The Dow Jones Industrial Average was 192 points, or 0.5% lower. On Thursday, major US stock indices Ended with losses.

The steepest increase in government bond revenue this week was the 10-year Treasury paper revenues at 2.920% in recent trade, its highest level since December 2018 and slightly higher than 2.917% on Thursday. Earlier on Friday, as the session continued, yields increased before the trend changed. Yields rise when the price of bonds falls.

Concerns about inflation and the pace of the Federal Reserve monetary tightening have been at the forefront of investors’ minds this week and have led to volatility in key stock indices. On Thursday, central bank chairman Jerome Powell gave investors a clear signal that he was the central bank. Is ready to tighten monetary policy quickly And at its meeting in May indicated that it was likely to raise interest rates by half a percentage point.

Rate hike next month following central bank A quarter-point increase in MarchFor the first time since 2006, the central bank has raised its policy rate at repeated meetings.

Mr. Powell’s comments that this year’s war in Ukraine, rising inflation and the rising Govt-19 lawsuits in China have led to new volatility in the stock market. Many traders are now worried that the tightening of the central bank may push the economy into recession as consumers worry about the economy. Next week, investors will analyze the latest figures from the University of Michigan on consumer sentiment in April.

Federal Reserve Chairman Jerome Powell on Thursday pointed out that the central bank may raise interest rates by half a percentage point at its meeting in May. Photo: Samuel Coram / Getty Images

On Friday, UK data from the National Bureau of Statistics showed signs of consumer boredom. UK retail sales fell sharply last month to 1.4%. This sent the British pound down 1.1% against the dollar to its lowest level since 2020. London’s FTSE 100 stock index fell 0.7%.

Susanna Schreider, a senior investment and market analyst at Hargreaves Lansdowne, said, “I think consumers are very reluctant to see what you see.” They want to put a lid on the boiling pot of inflation, but they do not want steam to be completely expelled from the economy.

For now, however, investors are encouraged by strong first-quarter returns. Of the companies that have reported so far, nearly 80% have surpassed analyst expectations. This has helped to provide some stability to the US stock market. Even with Thursday’s losses, the Dow Jones Industrial Average is currently up 1% at the end of the week.

Shares of airlines rose.

United Airlines Holdings

2.2% added and

American Airlines Group

Received 2.7%. On Thursday, the American said Its sales hit a record high in MarchIn the first month after the outbreak, the airline’s total revenue exceeded 2019. United says it has been able to pass on fuel prices to consumers.

Shares

American Express

Credit card company’s net income fell 0.6% to $ 2.10 billion in the first quarter, from $ 2.24 billion a year earlier, despite rising travel and entertainment spending.

Kimberly-Clark

Manufacturers of Huggies diapers and Cottonelle toilet paper reported a 8.4% increase in sales-growth after raising its sales-growth plan for 2022 and first-quarter sales over the previous year.

Shares

HCA Healthcare

The hospital chain fell about 11% after lowering the guideline for the year. The company said volume and revenue for the first quarter were offset by higher-than-expected inflationary pressures on labor costs.

Shares of Wall Street fell on Thursday after Federal Reserve Chairman Jerome Powell signaled that the central bank would raise interest rates by half a percentage point at its next meeting.


Photo:

Courtney Crow / Associated Press

Among commodities, Brent crude fell 1.7% to $ 106.11 a barrel, the international standard for oil.

In the currency markets, the ICE US dollar index rose 0.3%, gaining a weekly gain against other currencies. The index has risen for all but two sessions in April, including Friday. Thanks to geopolitical concerns and the central bank’s interest rate hike.

In overseas markets, the Pan-Continental Stoxx Europe 600 fell 1.3%, driven by German software companies SAP and technology companies.

Team Viewer,

It fell 3.4% and 3.8%, respectively. In contrast, the Swiss cement manufacturer

Holcim

The company rose 4.8% after announcing sales growth and improved its outlook for the year.

In Asia, Hong Kong’s Hong Cheng fell 0.2% and Japan’s Nikkei 225 fell 1.6%. In contrast, the Shanghai Composite rose 0.2%.

Write to Caitlin McCabe at [email protected]

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