The yield on US Treasury bonds is approaching 5% again this Thursday, dragging stocks around the world to multi-month lows in the middle of a week full of corporate earnings reports.
Furthermore, the gross domestic product (GDP) The US soared and grew at a rate of 4.9% in the third quarter of the year, according to the estimate published this Thursday by the Department of Commerce.
The rebound in US home sales and a five-year bond auction that shows weak demand are the latest factors that generate concern in the fixed income market. This translates to an 11 basis point increase in the US 10-year Treasury yield yesterday, a move that continues today, taking the benchmark yield to 4.989%, challenging 5.021%, the highest level reached this week since 2007.
Despite the US third quarter GDP data, not expected to ease bond market concerns as it is forecast to show the economy growing at its quarterly pace fastest in two years. This reinforces expectations that the Federal Reserve will keep interest rates high for a longer period.
Global markets: what to expect in the coming days
In the coming days, the publication of the personal consumption price index (PCE), the Federal Reserve’s preferred inflation indicator, is expected.
In markets, the European STOXX index is down 0.8%, just above seven-month lows hit this week, and MSCI’s broadest index of Asia-Pacific shares excluding Japan hits its lowest level in 11 months.
US Nasdaq futures down 1.2%, S&P 500 futures down 0.7%even after the three main US benchmark indices closed with sharp falls yesterday.
As for companies, Wednesday’s results have a significant impact on the market. Standard Chartered fell by more than 17%, while BNP Paribas fell by 4.5% and Swedbank by 7.5%, all after the publication of their reports.
Alphabet shares record their worst session since March 2020, down 9.5%, as stagnating growth at its cloud division disappoints investors. Besides, Meta Platforms gives up 2.6% in operations prior to market openingdespite its third quarter results exceeding expectations. Facebook parent company forecasts 2024 spending above estimates and suggests the conflict in Israel and Gaza could slow fourth-quarter sales.
In the currency market, the dollar index hits a two-week high of 106.88, boosted by rising yields, while the yen weakens beyond 150 per dollar, a level that puts operators on alert faced with possible intervention to support the Japanese currency, reaching a 10-month low of 150.78 per dollar.
Oil prices fall due to the increase in crude oil inventories in the United States and the strength of the dollar, although concerns about the conflict in the Middle East remain on the minds of traders. US crude oil fell 1.73%, reaching $83.88 per barrel, while Brent fell 1.36%, reaching $88.91 per barrel.
On the other hand, spot gold is experiencing an increase of 0.36%, reaching around $1,986.6 per ounce, testing the five-month high reached last week.
Source: Ambito
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