Bond yields fall as Netflix fuels stock market sell-off

[ad_1]

The chart of the German stock price index DAX is photographed at the Frankfurt Stock Exchange, Germany, September 5, 2018. REUTERS / Staff / File Photo

Register now to get free unlimited access to Reuters.com

Register

Stocks dip in Europe, Asia after Wall Street sell-off Oil prices slip away from 7-year highs, while Treasury yields dip as investors seek safety Graphic: global asset performance Graphic: global foreign exchange rates

NEW YORK/LONDON (Reuters) – Risk aversion dominated the markets on Friday as stocks fell on Wall Street and in Europe, oil prices fell from seven-year highs earlier in the week and bond prices rose as traders sought relative safety. of government debt.

Concerns about the strength of the Federal Reserve in tightening monetary policy rattled investors, as did weak subscriber growth reported late Thursday at Netflix Inc that cast a shadow over the market and sent its shares down 21%.

The Nasdaq, which has been the standout performer of the stock market boom since the pandemic began, is down more than 10% from its all-time high in November and is preparing for its worst week since the markets crash in March 2020.

Register now to get free unlimited access to Reuters.com

Register

With expectations that the Fed will raise interest rates four times this year and also cut its balance sheet, fear of a hard landing has increased among investors.

But a slowing economy in the coming months is likely to give the Fed second thoughts, said Stephen Riccito, chief US economist at Mizuho Securities USA LLC.

“By the time we get to our second rate hike, everything will have rolled around enough that everyone is back on those calls,” he said. “Growth numbers will slow much more quickly than the Fed expected.”

Yields on US Treasury and Eurozone government bonds fell as concerns about a potential conflict in Ukraine reduced risk appetite, and the stock market slumped increased demand for debt.

The yield on the 10-year Treasury fell 9.4 basis points to 1.740%, down sharply from a two-year high of 1.902% touched on Wednesday.

In Europe, the German, French and Italian indices fell nearly 2%, with the broad Euro STOXX (.STOXX) index of 600 regional leading companies closing 1.84% lower. The MSCI Worldwide All Countries Index (.MIWD00000PUS) is down 1.37%.

On Wall Street, the Dow Jones Industrial Average (.DJI) fell 1.20%, the S&P 500 (.SPX) lost 1.74%, and the Nasdaq Composite (.IXIC) lost 2.39%.

Markets in Asia were broadly lower, including in China where record mortgage rates were lowered on Thursday in the latest move to support an economy strained by the property sector. Read more

But the sharpest declines in recent days have been in US markets, with the S&P 500 heading towards its worst month since late 2020.

S&P 500 braced for biggest weekly drop since late 2020

The US dollar fell along with US Treasury yields, as investors look to the Federal Reserve’s meeting next week for more clarity on the outlook for interest rate hikes and quantitative tightening.

The dollar index, which measures the greenback against a basket of six currencies, fell 0.104% to 95.661. The yen was last down 0.39% to $113,6400. The euro rose in the latest trading 0.25 percent to 1.1338 dollars

Oil prices fell for a second day, dragged down by an unexpected rise in US crude and fuel stocks as investors booked profits after global oil standards touched a seven-year high.

Brent crude futures fell 49 cents, or 0.6%, to settle at $87.89 a barrel, while US futures closed down 41 cents at $85.14 a barrel.

Gold was on course to rise for a second week as inflation and geopolitical risks raised its appeal as a safe haven, but fell on Friday amid a broader decline in commodities.

US gold futures closed 0.6% lower at $1,831.80 an ounce.

Register now to get free unlimited access to Reuters.com

Register

(Reporting by Herbert Lash), Additional reporting by Sujata Rao in London and Canopria Kapoor and Stella Keogh in Singapore; Editing by Raisa Kasulowski, Kirsten Donovan, Alexander Smith and Jonathan Otis

Our Standards: Thomson Reuters Trust Principles.

.

[ad_2]