US stocks see further downsides as Powell gives hints on accelerated tapering

Stocks fell further during Tuesday’s trading day after a modest fall early in the session. The key average offset the rebounds seen in the previous session and reached the lowest daytime levels in at least a month.

In recent trading, the key average has remained almost flat and remains firmly in the negative territory. The Dow fell 617.74 points or 1.8 percent at 34,518.20, the Nasdaq fell 272.33 points or 1.7 percent at 15,510.51, and the S & P 500 fell 79.46 points or 1.7 percent at 4,575.81.

The early withdrawal on Wall Street partially reflected new concerns about new things. coronavirus A variant after the CEO of Moderna (MRNA) said in an interview that the Covid-19 vaccine is likely to be less effective against Omicron.

In an interview with the Financial Times, Moderna CEO Stephane Bancel said it would take weeks to determine how mutations affect the efficacy of vaccines currently available on the market.

“Depending on how much it has fallen, we may, on the other hand, decide to give higher doses of current vaccines around the world to protect people,” Bansel said. .. “Maybe very high-risk, immunocompromised people, and the elderly need a fourth dose.”

Regeneron Pharmaceuticals (REGN) has also warned of the Covid-19 antibody cocktail, and similar drugs may be less effective against Omicron variants.

Equities fell further after Federal Reserve Board Jerome Powell proposed in parliamentary testimony that the central bank would discuss accelerating the pace of reducing asset purchases at the next monetary policy meeting.

“at this point, Economy Is very strong and inflationary pressures are higher, so I think it’s appropriate to consider summarizing the tapering of asset purchases … probably a few months earlier, “Powell said.

In early November, the Fed announced plans to begin reducing $ 120 billion in monthly bond purchases by $ 15 billion per month.

Powell’s comment, suggesting an accelerating taper, said the recent surge in new Covid-19 cases and the emergence of Omicron variants pose a downside risk to employment and economic activity, increasing inflationary uncertainty in the Senate. It comes out when I talk to the banking committee.

“Increased concerns about viruses can discourage people from working directly, slow down labor markets and intensify supply chain disruptions,” Powell said.

Powell pointed out that the supply-demand imbalance associated with pandemics has already contributed to significant price increases in some regions, which could intensify supply chain turmoil.

Sector news

Oil services stocks showed a sharp downtrend on the day, with the Philadelphia Oil Services Index declining 4.2% to its lowest daytime level in three months.

Oil service stocks are on sale as crude oil prices plummet, and crude oil delivered in January has plummeted from $ 5.38 a barrel to $ 64.57.

Tobacco stocks also show significant weaknesses, as evidenced by the 3.9% increase in the NYSE Arca Tobacco Index. The index fell to a midday low for almost 10 months.

The sharp drop in financial yields has also contributed to the significant weakening of financial stocks, with the NYSE Arca Broker / Dealer Index and KBW Bank Index falling 3.7% and 2.9%, respectively.

Natural gas, airlines and steel stocks have also fallen, along with most other major sectors, showing a marked downtrend.

Other markets

In foreign trade, stocks market On Tuesday, various performances were seen throughout the Asia-Pacific region. Japan’s Nikkei 225 Index fell 1.6%, while China’s Shanghai Composite Index rose slightly and Australia’s S & P / ASX 200 Index rose 0.2%.

Meanwhile, all major European markets have moved down that day. Germany’s DAX index fell 1.2%, while France’s CAC 40 index and the UK’s FTSE 100 index fell 0.8% and 0.7%, respectively.

In the bond market, government bonds have receded from their highest levels, but continue to show significant strength. After that, the yield on the benchmark 10-year bond, which moves in the opposite direction of the price, drops by 8.4 basis points to 1.446%.

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US stocks see further downsides as Powell gives hints on accelerated tapering

Source link US stocks see further downsides as Powell gives hints on accelerated tapering

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