US stocks continued to fall Wednesday morning as investors snap up bonds. The demand is keeping bond prices high and yields low.
Advertisement
Stocks opened lower, and the Dow Jones industrial average fell as much as 127 points early on.
Major U.S. indexes finished higher.
Asian markets sold off on Wednesday as investors scurried into safe-haven plays on global growth concerns that sent bond yields to record lowers.
The day before, investors flocked to bonds and sold off all but the steadiest stocks as they anxious about the health of Britain’s financial system.
Asian stocks fell, capping a weekly decline, as a stronger yen weighed on Japanese shares and investors waited for a U.S.jobs report to assess its implications for monetary policy. The benchmark S&P/ASX 200 index inched up 2.60 points or 0.05 percent to 5,230.50 ahead of U.S.jobs data due tonight and Chinese inflation figures slated for release over the weekend. The Nasdaq composite gained 36.26 points, or 0.8 percent, to 4,859.16.
GOLDEN: The price of gold rose $11.30 to $1,370 an ounce, and silver gained 17 cents to $20.08 an ounce. Officials also anxious about the outcome of Britain’s vote to leave the European Union, which had not yet been held when they met June 14-15. According to Tradeweb, both yields set all-time lows early Wednesday, reaching 1.32 percent and 2.10 percent, respectively.
Bond yields have tumbled over the last few months following a weak U.S.jobs report and then unexpected result of the British referendum. Though the USA economy appears to be in fairly rosy shape, the Fed is not expected to raise interest rates again soon. The U.S. unemployment rate is expected to tick up to 4.8 percent from 4.7 percent.
OUT OF THE QUEUE: Netflix stock fell after a Jefferies & Co. analyst said its US subscriber growth may be slower than expected.
The broker said Rakuten is in a good position for long-term growth, but has some nearer obstacles to overcome in terms of earnings growth and increasing competition in the e-commerce market. He downgraded the stock to “Underperform” from “Hold” and cut his price target to $80 per share from $120.
U.S. benchmark West Texas Intermediate added one per cent to US$45.58 and Brent rose 1.2 per cent to US$46.96. Phone company stocks and banks took some of the biggest losses.
Nortek, which makes heating and ventilation systems for buildings, agreed to be acquired by Melrose Industries PLC for $86 per share, or $1.4 billion.
Nintendo Co. jumped 8.8 percent, the most on the Topix. The yield on the 10-year Treasury note was little changed from late Tuesday at 1.38 percent.
The yen is trading near the highest levels in more than two years, pressuring earnings for Japanese exporters. Phillips 66 slumped $2.52, or 3.2 percent, to $75.41.
Oil prices bounced back slightly Friday after a mauling the day before fuelled by a smaller-than-expected fall in USA inventories.
ENERGY: Oil prices extended gains, with benchmark USA crude futures rising 50 cents to $47.94 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, used to price global oils, fell 21 cents to $47.75 a barrel in London. “Summer driving season in the US will end within the next two months, which is when demand for gasoline is at its highest, and yet gasoline inventories are not declining as expected”. The Energy Information Administration said stockpiles rose by 1.4 million barrels.
The price of wholesale gasoline remained at $1.43 a gallon. On the other side, gold remains well supported above $1,350 mark. Natural gas rose 2 cents to $2.79 per 1,000 cubic feet.
“Other sectors will start to implode, edging the United Kingdom economy and British pound lower”. The dollar fell to 101.04 yen from 101.55 yen on Tuesday. The euro rose to $1.1105 from $1.1075.
OVERSEAS: France’s CAC lost 1.9 percent and Germany’s DAX shed 1.7 percent while Britain’s FTSE 100 fell 1.2 percent.
Advertisement
South Korea’s Kospi index was little changed. Hong Kong’s Hang Seng index slid 1.2 percent.
