“There seems to be a lack of conviction”said Randy Frederick, vice president of trading and derivatives at Charles Schwab. “Dip buyers step in but then run out of momentum,” he added.
Stocks are off to a rocky start in 2022, as a rapid rise in Treasury yields on fears the US Federal Reserve will turn aggressive in reining in inflation has hit technology and growth stocks particularly hard.
Treasury bond yields were relatively flat on Thursday, after falling from two-year highs.
“Just the fact that they haven’t gone any higher … at least for today is a welcome respite from the steady march to the upside we’ve been experiencing,” said David Joy, chief market strategist at Ameriprise Financial.
Investors expect a Fed rate hike in March and three more this year. Next week’s January meeting will also be scrutinized for clues as to whether the US central bank will speed up its bond-buying program and when it is likely to start reducing its huge balance sheet.
Benchmark 10-year note yields stood at 1.825%, having hit 1.902% in overnight trading on Wednesday, which was the highest since January 2020.
Still, “the market is a little bit oversold,” said Tom di Galoma, managing director of Seaport Global Holdings in New York.
“Yields could drop to the 1.70% to 1.75% zone, although they are likely to resume their rise as Fed rate hikes loom,” di Galoma said. “I think the big institutional accounts are looking to sell rallies rather than buy the dip.”
Source From: Ambito
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