Zhongxin Finance, May 10 (Reporter Xie Yiguan) The shock wave of the Federal Reserve's monetary tightening policy is still continuing. On May 9 (Monday) local time, the US stock market continued the weak market for the previous two trading days, and suffered another heavy setback, and the global stock market also "dim".
U.S. stocks lost more than 14 trillion yuan in market value on Monday
Before the market on Monday, concerns about policy tightening pushed the 10-year U.S. bond rate to a high of 3.2%. Under the volatility of interest rates, the three major U.S. stock indexes opened sharply lower and remained low and volatile during the session.
As of the close, the Dow fell 1.99% to 32,245.70 points, a new low since March 2021; the Nasdaq fell 4.29% to 11,623.25 points, a new low since November 2020; the S&P 500 fell 3.2% to 3,991.24 points, falling below 4,000 points This is the first time since April 2021.
Major U.S. stock indexes closed at the close.
Large technology stocks fell across the board. Tesla fell 9.07%, Amazon fell 5.21%, Apple fell 3.32%, Meta fell 3.71%, Microsoft fell 3.69%, and Google A fell 2.8%.
The six major tech stocks lost a combined $365.9 billion in market value on Monday, or about 2.46 trillion yuan.
Twitter, which is targeted by short sellers, also closed down 3.69% on Monday.
Most popular Chinese concept stocks also fell. New Oriental fell 16.39%, NetEase Youdao fell 13.88%, iQiyi fell 10.9%, Bilibili fell 9.83%, Pinduoduo fell 8.48%, Jingdong fell 8.22%, Baidu fell 8.68%, Alibaba fell 5.79% and Tencent fell 3.62%.
In addition, U.S. aviation stocks, chip stocks, and energy stocks also fell.
According to media reports, among the nearly 7,000 (6,947, excluding OTC) listed companies in the US stock market, the total market value loss on Monday was as high as 2.1 trillion US dollars, or about 14.18 trillion yuan.
Stocks, bonds, and gold fall, and global capital markets are "gloomy"
U.S. stocks closed lower for three consecutive days, and other major stock markets did not perform as well as expected.
On Monday, major European stock indexes closed sharply lower, with Germany's DAX index, France's CAC40 index, and Italy's FTSE MIB index all down more than 2%, and all fell for four consecutive days.
Stock market performance in some European countries.
On Monday, the major Asia-Pacific stock indexes also closed down collectively. The Nikkei 225 index fell 2.53%, the largest one-day decline since March 7; Vietnam's VN30 index closed down 4.31%, the second largest one-day decline this year.
In terms of safe-haven assets, before inflation has yet to see an inflection point, the market is worried that the Fed's "last resort" tightening too fast may put more pressure on growth and profits. The US bond yields reversed during the session, and the 10-year US bond yields The rate closed back down to around 3%.
European bond yields also mostly fell.
Precious metals such as gold are also no longer popular, with COMEX gold futures falling 1.55% to $1,853.7 an ounce.
International oil prices were also affected and fell across the board.
On Monday, the June U.S. crude oil contract fell 6.76% to $102.35 a barrel; the July Brent crude contract fell 6.35% to $105.25 a barrel.
"Oil prices are falling rapidly given the heightened fears of demand destruction for crude oil given the COVID-19 outbreak and de-risking events in the U.S. stock market," said Edward Moya, senior market analyst at Oanda.
New York Stock Exchange.
Photo by China News Agency reporter Liao Pan
This round of US stock bear market will not end until October?
In the face of the decline in US stocks, Sanctuary Wealth Chief Investment Officer Jeff Kilburg believes that this is a major asset re-pricing and a serious imbalance, which is stimulated and promoted by the Fed's policy.
“I think the only way for stocks to bottom out and the market to recover anytime soon is if the Fed has the ability to use the tools in its toolbox to stabilize rates. The 10-year yield needs to get back below 3%.”
According to a new report from Michael Hartnett, chief investment strategist at Bank of America Global Research, U.S. stock investors will experience inflation, interest rates and recessions for most of 2022.
Drawing on the historical bear market data of U.S. stocks, this round of the U.S. stock market bear market will end on October 19, 2022, when the S&P 500 and Nasdaq will hit 3,000 and 10,000 points, respectively.
"The volatility of U.S. stocks has intensified recently, which may be due to optimistic market interest rate hike expectations. Although a 75 basis point rate hike is currently ruled out, it does not rule out the possibility of continuous interest rate hikes in the future. Regarding the trend of U.S. stocks in the next year, due to liquidity ( Due to the dual pressures of raising interest rates, shrinking balance sheets) and declining corporate profits, a phased decline may occur in 2022." Guo Shengbei, vice president of Tianfeng Securities, believes.
It is worth mentioning that the Federal Reserve warned in its semi-annual financial stability report released on Monday that liquidity conditions in major financial markets are deteriorating due to rising risks from the Russian-Ukrainian conflict, monetary policy tightening and high inflation.
"According to some indicators, liquidity in recently issued Treasury and stock index futures markets has declined since the end of 2021."
"While the recent liquidity deterioration has not been as extreme as some past events, the risk of a sudden and significant deterioration appears to be higher than normal," the report said. "Furthermore, since the outbreak of the conflict between Russia and Ukraine, liquidity in the oil futures market has at times been tight, while A number of other affected commodity markets are clearly dysfunctional."
"High inflation and rising interest rates in the U.S. could negatively impact U.S. domestic economic activity, asset prices, credit quality and broader financial conditions," the report said.