Government bond yields fall easing investment sentiment
Focus on Biden and Powell's remarks tomorrow
[Asia Economy New York=Correspondent Baek Jong-min] The New York stock market eased as inflation, which had been a concern, appeared to stabilize.
On the 13th (local time), the Dow Jones Industrial Average closed down 8.22 points (0.03%) at 31,060.47, the S&P 500 index rose 8.65 points (0.23%) to 3,809.84, and the Nasdaq index increased by 56.52 points (0.43%) to 13,128.95.
Although the Dow turned downward near the end of the session, the market showed a generally positive trend that day. Investor sentiment improved as the pre-market consumer price inflation rate was not as high as feared.
The December Consumer Price Index (CPI) released by the Department of Labor rose 0.4% month-over-month, in line with market expectations. The core CPI, which reflects the surge in oil prices, also increased by 0.1% month-over-month and 1.6% year-over-year in December.
With inflation rising only as expected, U.S. Treasury yields fell. The 10-year U.S. Treasury yield briefly exceeded 1.18% during the previous session but dropped below 1.1% on this day.
The market was not significantly affected by the impeachment of President Donald Trump but is focusing on the economic stimulus plan of President-elect Joe Biden scheduled for the next day and remarks from Federal Reserve Chairman Jerome Powell.
Fed Governor Lael Brainard said that "the current pace of bond purchases will remain appropriate for the time being," adding that the pace could be increased if the economy demands it. This contrasts with some Federal Reserve presidents who have mentioned an early halt to bond purchases.
Intel, which announced a CEO change, led the tech sector rally with its stock rising 6.79%. In contrast, competitor AMD's stock fell 3.7%.
Affirm, which started trading for the first time that day, showed a strong surge with its stock price rising 98.45% from the IPO price.
February delivery West Texas Intermediate (WTI) crude oil ended a six-day winning streak, closing down 0.6% ($0.30) at $52.91 per barrel compared to the previous day. February delivery gold closed up 0.6% ($10.70) at $1,854.90 per ounce.
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