(CercleFinance.com) – The New York Stock Exchange should open in the red Monday morning, still penalized by the decline in technology stocks against a backdrop of continued rise in bond yields.
Half an hour before the opening, the ‘futures’ contracts on the New York indices show losses ranging from 0.3% to 1.2%, announcing a continuation of the downward movement started last week.
Wall Street had already suffered losses last week since the Dow Jones had contracted by 1.9%, while the Nasdaq suffered a more severe correction of around 4.5%.
This profit taking – which comes after a sparkling end to 2021 – is helped by the rapid rally in bond yields, itself fueled by the prospect of accelerating Fed rate hikes.
The benchmark yield on US Treasury bonds continues to rise, to over 1.78%, a new high since early 2020.
Goldman Sachs announced over the weekend that it now plans four Federal Reserve rate hikes this year, in March, June, September and now also December.
The pullback in equities is also accompanied by a surge in volatility as the CBOE’s VIX index – often referred to as the fear index – climbs 12% to over 21 points, a one-month high. .
Investors are also eagerly awaiting the consumer price statistics which will be published before the opening on Wednesday.
Higher-than-consensus figures could well lead to a further rise in government bond yields and rekindle fears about further rate hikes, the two factors that have weighed heavily on the markets since the start of the year.
In addition, investors seem unwilling to commit too much before the start of the quarterly earnings ‘season’ in the United States, which could also reveal the serious repercussions of inflation.
Banking giants JPMorgan Chase, Citi and Wells Fargo will unofficially kick off earnings releases with their fourth quarter accounts this Friday.
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