New York stock market mixed amid rising tech stocks… S&P 500 and Nasdaq close all the way

(New York = Yonhap News) Yonhap Infomax Correspondent Young-sook Yoon = New York stock markets were mixed as tech stocks rose in the address of Federal Reserve Chairman Jerome Powell at the Jackson Hole Symposium last week.

On the 30th (Eastern Time) on the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 35,399.84, down 55.96 points (0.16%) from the previous day.

The Standard & Poor’s (S&P) 500 index rose 19.42 points (0.43%) to 4,528.79, and the Nasdaq index, centered on technology stocks, closed at 15,265.89, up 136.39 points (0.90%) from the battlefield.

Nasdaq High Close (GIF)

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The S&P 500 and Nasdaq Indexes, which closed at all-time highs on the 27th, also broke new all-time highs on the same day.

Although Chairman Powell mentioned the possibility of a tapering within the year, he emphasized that the rate hike is far away.

“If the economy develops as broadly as expected, it may be appropriate to start slowing down asset purchases within the year,” Powell said at a Jackson Hole symposium last week.

There was no ‘taper tantrum’ as the market has reflected the possibility of tapering within the year to some extent, and Chairman Powell emphasized that the standard for rate hikes would be much higher than tapering.

The 10-year government bond yield fell to 1.27%, down more than 3bps on the same day. This is a significant drop from the 1.36% recorded on the 26th before Chairman Powell’s remarks came out.

Investors are paying attention to the release of the employment report for August, due later this week.

If employment is stronger than expected, the prospect of a tapering announcement could be strengthened at the Federal Open Market Committee’s (FOMC) regular meeting scheduled for September 21-22.

Economists expect 750,000 new jobs in the non-farm sector in August, according to the Wall Street Journal. In delivery, it recorded 943,000 people. The unemployment rate is expected to fall to 5.2% from 5.4% in the previous month.

The market has some belief that the stock won’t fall significantly despite the tapering, but with the stock up more than 20% this year, the correctional pressure could increase.

In particular, the valuation burden is expected to increase as the growth rate slows toward the second half of the year and the company’s earnings are past the peak.

The number of hospitalized COVID-19 patients in the United States has surpassed 100,000.

The New York Times (NYT) reported on the 29th that the average number of inpatients per day for seven days in the United States was 100,000,357. This is the highest number outside of last winter, when the coronavirus pandemic peaked.

The European Union (EU) decided to restrict entry into the United States again after two months due to the rapid spread of the COVID-19 delta mutation. It was restored two months after the entry restrictions for tourists from the United States were lifted in June.

The economic indicators released today were generally sluggish.

The Dallas Federal Reserve Bank of America’s manufacturing activity index fell sharply to 9.0 from 27.3 in the previous month. The Wall Street Journal’s (WSJ) estimate of 23.5 fell far short of the consensus, the lowest level since January.

Sales of pending (escrow open) homes, which entered into a sale contract in July, fell short of market expectations.

The National Association of Realtors (NAR) reported that the pending home sales index for July was 110.7, down 1.8% from the previous month.

This was lower than the 0.5% increase from the previous month, which was expected by experts compiled by the Wall Street Journal (WSJ).

By industry, technology stocks and real estate-related stocks rose more than 1%, leading the rise, while financial stocks and energy-related stocks fell more than 1%.

Shares of online payment company PayPal rose more than 3% on news that the company was looking for ways to allow US customers to trade individual stocks.

The share price of post-payment company Aperm rose more than 40% on the news of the partnership with Amazon.

The share price of Support.com, an American technology support company that emerged as a meme stock, rose by 38% as individual investors bought it.

The share price of Global Star, a satellite service provider, soared by 63% on the news that Apple’s next premium phone, the iPhone 13, to be unveiled in September, may have a satellite function and that Apple is highly likely to cooperate with the company. Shares of Apple also rose more than 3% on the news.

Robinhood shares fell more than 6% after SEC Chairman Gary Gensler said he could ban the practice of selling order flows to customers.

New York stock market experts said the Fed’s tapering signal will become more concrete at the next meeting, which could increase market correctional pressure.

Morgan Stanley’s Mike Wilson wrote in the report, “Given record GDP and earnings growth, rising inflation and peaking in delta infections, the Fed will feel even greater pressure to remove accommodative emergency measures. “I think a more official signal will come from the September FOMC, and the market is likely to expect it.”

He warned the market could see a 10% correction in the near future, saying that the Fed’s tapering official means higher interest rates and lower stock valuations.

According to the Chicago Mercantile Exchange (CME) FedWatch, the Federal Funds (FF) interest rate futures market reflected a 38.1% chance of a 25bp rate hike in December next year, lower than the previous 39.9%. The probability of a 50bp rate hike was 13.9%, down from 17% in the battlefield.

On the Chicago Board Options Exchange (CBOE), the Volatility Index (VIX) fell 0.20 points (1.22%) to 16.19 from the battlefield.

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