Stocks fall and bond yields rise as Waller dents pivot hope

Stocks fall and bond yields rise as Waller dents pivot hope
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  • Fed’s Waller downplays recent inflation data
  • Beijing establishes property support, COVID measures
  • Biden meets China’s Xi at G20 meeting

NEW YORK, Nov 14 (Reuters) – A gauge of global stocks declined on Monday after posting its biggest weekly percentage gain in two years last week and U.S. bond yields rose as a Federal Reserve official lowered hopes that the central bank may be close to pausing its tightening path.

Stocks rose last week and US Treasury yields plunged afterwards consumer price data indicated that stubbornly high inflation may finally be starting to slow.

But the Federal Reserve Governor Christopher Waller He said on Sunday that while the central bank might consider slowing rate hikes at its next meeting, that should not be taken as a “softening” in the fight to reduce inflation, and while the data was “good news,” they were “just a data point”.

“The market expects the Fed to continue its aggressive rate rhetoric,” said Peter Cardillo, chief market economist at Spartan Capital Securities.

“That could all change once we get more confirmation on inflation in December. Once (the Fed) raises rates to 50 (bps), there’s a chance they’ll signal lower rates.”

On Wall Street, the S&P 500 dipped modestly after posting its biggest weekly percentage gain since June last week, pressured by declines in mega-cap growth companies like Microsoft. (MSFT.O) and Amazon (AMZN.O) who have struggled this year as the Fed embarked on its path of rate hikes.

The Dow Jones Industrial Average (.DJI) rose 25.23 points, or 0.07%, to 33,773.09, while the S&P 500 (.SPX) lost 5.22 points, or 0.13%, to 3,987.71 and the Nasdaq Composite (.IXIC) it fell 78.59 points, or 0.69%, to 11,244.74.

The pan-European STOXX 600 index (.STOXX) rose 0.27% and the gauge of MSCI shares worldwide (.MIWD00000PUS) shed 0.09%.

Investors will look at inflation again when the US Producer Price Index is released on Tuesday.

Benchmark 10-year notes rose 6.4 basis points to 3.893% from 3.829% late on Thursday. The bond market was closed for the Veterans Day holiday on Friday.

The two-year yield rose 10.5 basis points to 4.431%, from 4.326%.

In contrast, dovish comments from the European Central Bank politician Fabio Panetta and Cypriot policymaker Constantinos Herodotou helped push European bond yields lower, though short-term rates remained near recent multi-year highs.

Germany’s 2-year government bond yield fell 1.9 basis points to 2.111% from 2.13%, after rising to 2.252% last week, its highest level since 2008.

After its biggest weekly percentage drop since March 2020 last week, the dollar index was up 0.15% and the euro was down 0.21% at $1.033.

US-listed Chinese stocks won on reports regulators asked financial institutions to extend more support to stressed property developers amid signs the government may be beginning to relax some of its strict COVID-19 policies. Shares of e-commerce firm rose 1.61%.

United States President Joe Biden met Chinese leader Xi Jinping in person on Monday for the first time since taking office on the sidelines of the Group of 20 (G20) summit, with both stressing the need for better dialogue between their nations and the two sides establishing a mechanism for more frequent. communications

In cryptocurrencies, bitcoin was down 1.41% at $16,518 after dipping below $16,000 for the first time since Thursday as investors continue to assess the consequences from last week’s crash of crypto exchange FTX.

Reporting from Chuck Mikolajczak; Additional reporting by Ankika Biswas; Edited by Jan Harvey

Our standards: The Thomson Reuters Trust Principles.

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