2023-10-21 15:05:07
Washington: Sharif Adel
US stocks continued to decline in trading on the last days of the week, under pressure from investors’ fears of the repercussions of the situation in the region. Treasury bond yields also rose, with ten-year bonds trading at a yield exceeding 5%, for the first time since 2007.
During Friday’s trading, it became clear that the selling waves of stocks and bonds accelerated, causing their prices to decline, ending the day in the red zone. The decline in bond prices represents the flip side of the rise in bond yields. The pace and quantities of stocks offered increased as the trading session approached its conclusion, with the Dow Jones Industrial Average losing 286 points, representing 0.86% of its value, the S&P 500 Index losing 1.26%, and the Nasdaq Index’s loss exceeding 1.50%.
One of the analysts told the CNBC economic station that investors are getting rid of stocks and bonds, and are turning to preserving cash or investing in gold, at a time when everyone is trying to reduce exposure to risks. Ten-year US bond yields represent great importance for the various American markets. It affects the interest rates applied to mortgage loans, car loans, and credit cards, and it also takes billions of dollars from stock markets, the more investors prefer to avoid risks.
David Donabedian, chief investment officer at CIBC Private Wealth Management, said that the stock market is watching the bond market, and yields are still rising, even with relatively good news on inflation, and Federal Reserve officials are paving the way for not raising rates at the November 1 meeting, and this is why The main reason behind the weakness of the stock market.
Also this week, the fixed interest rates applied to 30-year mortgage loans rose to exceed 8% for the first time since 2000, which caused applications for them to decline to their lowest levels since 2010, which witnessed thousands of homes being offered for forced sale, after their buyers failed to pay. Its loan installments. During trading on Friday, shares of regional banks fell, as investors expected that these banks would achieve huge losses on the bonds they held, coinciding with the rise in returns in the secondary market. The fund, which specializes in investing in regional banks, KRE, declined by nearly 4% during trading on Friday.
After the US administration tightened the ban on the sale of chip technology products to China, Nvidia’s stock, the largest chip design company in the world, whose market value recently exceeded $1 trillion, recorded its worst week since September 2022, with a loss approaching 9%.
Also, Tesla shares, the largest manufacturer of electric cars in the world, ended the week’s trading down by more than 15%, recording its worst week since December, despite the company exceeding analysts’ expectations in sales and net profit, after its president, Elon Musk, the richest man in the world (before the decline Share value), the length of time required for the new Cybertruck to start contributing to the company’s revenues.
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