Stocks fall and bond yields rise as Waller shakes hopes

  • Fed Waller Downplays Recent Inflation Data
  • Beijing explains real estate support, COVID steps
  • Biden meets China’s Xi at G20 meeting

NEW YORK, Nov. 14 (Reuters) – A gauge for global equities fell Monday after last week saw its biggest weekly percentage gain in two years, and U.S. bond yields rose as a Federal Reserve official dampened hopes the central bank would is about to stop her tightening pad.

Stocks rose last week and US Treasury yields plummeted after consumer price data indicated that stubbornly high inflation could finally slow.

But Federal Reserve Governor Christopher Waller said on Sunday that while the central bank may consider slowing the pace of rate hikes at its next meeting, it should not be taken as a “softening” in the inflation battle. reduce. “good news” it was “just one data point.”

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

“That could all change if we get more confirmation about inflation in December. Once they (the Fed) raise rates by 50 (bps), there’s a possibility they’ll quote lower rates.”

On Wall Street, the S&P 500 was slightly lower after recording its biggest weekly percentage gain since June last week, as declines in megacap growth companies like Microsoft (MSFT.O) and Amazon (AMZN.O) have struggled this year. as the Fed started its course 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) fell 78.59 points. or 0.69%, to 11,244.74.

The pan-European STOXX 600 index (.STOXX) rose 0.27% and the MSCI index of stocks around the world (.MIWD00000PUS) lost 0.09%.

Investors will look to inflation again when the US producer price index is released on Tuesday.

10-year benchmark bonds rose 6.4 basis points to 3.893%, from 3.829% late Thursday. The bond market was closed on Friday in observance of Veterans Day.

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

By contrast, easing comments from European Central Bank policymaker Fabio Panetta and Cypriot policymaker Constantinos Herodotou helped push European bond yields down, although short-term yields have recently remained near multi-year highs.

The yield on German 2-year government bonds fell 1.9 basis points from 2.13% to 2.111%, after rising to 2.252% last week, the highest since 2008.

After the largest weekly percentage decline since March 2020 last week, the dollar index rose 0.15% and the euro 0.21% to $1,033.

US-listed Chinese stocks gained after reports that regulators have asked financial institutions to lend more support to stressed property developers amid signs that the government may begin easing some of its strict COVID-19 policies. Shares of e-commerce company rose 1.61%.

US President Joe Biden met Chinese leader Xi Jinping personally on the sidelines of the Group of 20 (G20) summit on Monday for the first time since taking office. Both stressed the need for better dialogue between their nations and the two sides having a mechanism for more frequent communication.

In cryptocurrencies, bitcoin last fell 1.41% to $16,518 after falling below $16,000 for the first time since Thursday, as investors continue to assess the fallout from last week’s collapse of crypto exchange FTX.

Reporting by Chuck Mikolajczak; Additional reporting by Ankika Biswas; Editing by Jan Harvey

Our Standards: The Thomson Reuters Trust Principles.

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