ORIGINAL LINK : https://www.asiae.co.kr/article/2023110706431799843
The three major indices of the U.S. stock market in New York continued their strong rally from last week, closing with gains across the board on the 6th (local time). The NASDAQ index rose for the seventh trading day in a row, marking its longest upward streak since January.
On this day, at the New York Stock Exchange (NYSE), the blue-chip-focused Dow Jones Industrial Average closed up 34.54 points (0.10%) at 34,095.86. The large-cap-focused S&P 500 index rose 7.64 points (0.18%) to 4,365.98, and the tech-focused NASDAQ index climbed 40.50 points (0.3%) to 13,518.78. The NASDAQ index has recorded its longest upward streak since January with a seven-day winning streak.
Investors are waiting for the schedule of September trade balance (7th), 10-year Treasury note (8th), and 30-year Treasury bond (9th) auctions to be announced this week. Public remarks by Jerome Powell, Chairman of the Federal Reserve (Fed), and John Williams, President of the New York Federal Reserve Bank, are also scheduled for the 8th.
The New York stock market set its best weekly record so far this year amid bets on the end of the Fed’s tightening. According to CME FedWatch, the outlook for a rate freeze in December fell to 90.4% from 95.2% last Friday, but it is still higher than the previous week (74.4%). Also, the possibility of a minimum 25bp (1bp=0.01%p) rate cut at the meeting in May next year has risen to over 50%.
Adam Sarhan, CEO of 50 Park Investments, explained that “the market is taking a breather as it digests last week’s very strong rally,” and is waiting for the next upward momentum, such as comments from Chairman Powell and Fed officials, and corporate earnings this week.
Ahead of this week’s Treasury auctions, the yield on the 10-year U.S. Treasury note in the New York bond market recorded 4.65%, up 0.09%. The 30-year yield is 4.82%, and the 2-year yield, sensitive to monetary policy, is moving at 4.94%.
Investors are also keeping an eye on Middle Eastern risks. As the death toll of civilians surpasses 10,000 due to Israel’s attack on the Gaza Strip amid its war with Hamas, international criticism against Israel and the U.S. has intensified. The U.S. is stepping up diplomatic pressure on Israel to bring about a temporary ceasefire on humanitarian grounds.
The White House announced on the day that U.S. President Joe Biden had a call with Israeli Prime Minister Benjamin Netanyahu and discussed the possibility of a tactical ceasefire. They also exchanged views on efforts to secure the release of hostages held by Hamas. Previously, Secretary of State Tony Blinken proposed a temporary ceasefire on humanitarian grounds, including the release of hostages, during a meeting with Prime Minister Netanyahu on the 3rd. However, after the meeting, Netanyahu stated that he would reject any temporary ceasefire proposal that does not include the release of hostages.
International oil prices rose as Saudi Arabia and Russia reaffirmed their stance to cut production. On this day, the price of West Texas Intermediate (WTI) crude for December delivery at the New York Mercantile Exchange closed up 31 cents (0.39%) at $80.82 per barrel. Despite the day’s rise, oil prices are down 11.95% from a 52-week high and have only risen 56 cents (0.7%) so far this year. Over the weekend, Saudi Arabia and Russia reaffirmed their policy to continue reducing oil production and supply until the end of the year.
Meanwhile, there are observations on Wall Street that it will be difficult for the stock market to create additional upward momentum in the future. Marco Kolanovic of J.P. Morgan said, “As focus shifts to ongoing interest rate hikes and growth slowdown prospects, stocks will soon lose their appeal to investors.” David Donabedian, Chief Investment Officer of CIBC Private Wealth, predicted that “(the U.S. stock market) will experience ‘manic volatility’ for the rest of this year, depending on where long-term interest rates are heading.”
Reporter Yoo Jin Jo tint@asiae.co.kr
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