U.S. stocks fall hard U.S. bond yields dollar soars

China’s social finance added 1.85 billion yuan in April, and M2 money supply increased 8.1% year-on-year. Wang Yiming, a member of the Central Bank’s Monetary Policy Committee, said that the financial system still maintains a strong support for the real economy.

The U.S. CPI surpassed expectations in April, with nominal CPI increasing 4.2% year-on-year, the highest since the financial crisis in September 2008, and core CPI increasing 3% year-on-year, the largest increase since 1996. Money markets expect the Fed to raise interest rates in December next year with a probability of 25 basis points is 100%. The financial blog Zerohedge said the weakness of non-farm payrolls overlaid with inflation is equal to the “stagflation” signal.

The Fed’s “second-in-command”, Vice Chairman Clarida reassured the market after the release of the inflation data, arguing that the U.S. economy will reboot after the epidemic will be imbalanced, the uncertainty around inflation is unusually high, and inflation will return to or slightly above 2% in the next two years. But he also stressed that the Fed will not hesitate to take action to curb inflation if needed.

European and U.S. stocks diverged as U.S. stocks fell three days in tandem, with the Dow the worst in January and the S&P the worst in February, led by technology and chip stocks

On Wednesday, May 12, inflationary trading logic continued to influence the performance of broad asset classes such as equities as U.S. inflation data for April far exceeded market expectations. Large technology stocks led the broader market decline for the third consecutive day, but also the three major U.S. stock indexes fell for the third consecutive day, and the end of the decline quickly deepened.

S&P 500 index opened down 0.7%, the opening two hours of the decline expanded to 1.8%, lost the 4100-point barrier, the deepest late 2.3% drop. The Dow opened down 146 points, the deepest intra-day drop of nearly 714 points or down 2.1%, lost 34,000 points to the integer level, Home Depot and Boeing again led the decline. The Nasdaq opened down nearly 180 points or 1.3%, the deepest drop of nearly 387 points or down 2.9%, forcing the 13,000-point barrier.

The Russell 2000 small-cap index also fell more than 3%. Measure of S&P volatility “panic index” VIX soared nearly 30%, once surpassed 28, standing firm at a two-month high. The panic index long ETF soared 20%, nearly tripling so far this year.

By the end of the day, U.S. stocks collectively fell for three days in a row, the Nasdaq and Russell 2000 small-cap stocks closed below the 200-day average.

The S&P 500 closed down 2.14% at 4,063.04 points, a six-week low since April 1 and the biggest one-day drop in February, having halted a three-day streak and fallen to a new all-time high on Monday. The Dow closed down 1.99% or nearly 682 points at 33587.66, the lowest since April 8 and the biggest one-day drop in January, having halted a five-game winning streak and fallen to an all-time high on Monday. The Nasdaq closed down 2.67% at 13,031.68, the lowest since March 25, and has fallen more than 5% this week. The Russell 2000 small-cap stock fell 3.3%, underperforming the broader market. The Nasdaq Biotechnology Index closed below its 200-day average for the first time since last April.

FAAMNG star tech stocks fell hard en masse, with Apple and Amazon both closing below their 200-day averages.

Facebook closed down 1.3% after falling 2.7% deep, once losing $300 during the session and closing at its lowest since April 23. Amazon and Apple fell more than 2%, Microsoft fell nearly 3%, both hitting the lowest since March 31, Apple and Microsoft both fell for three consecutive days. Nifty fell more than 2%, the lowest since Nov. 24 last year. Google parent company Alphabet fell more than 3%, falling for three days to the lowest since April 1.

Tesla fell 4.4%, falling for three days to the lowest since March 8 and the first time in two months that it closed below $600. Bullish Tesla and other innovative technology stocks, “Queen of the Bull” Cathie Wood’s flagship fund ARKK fell nearly 4% on Wednesday to the lowest since November 18 last year, Tuesday was the first time in six months to fall below $ 100 intraday, after a 150% surge last year, down 18% so far this year.

New energy vehicles are falling, and the trend of the Chinese “three fools” is divided. Azera fell 3.4 percent, and Xiaopeng dropped slightly, with both shares hitting six-month lows. Ideal Auto closed up 4.5% after rising more than 9% and regained $18 during the day, hitting a high since May 7.

Chip stocks fell in tandem. Philadelphia Semiconductor Index fell 4.2%, falling for two days and hit the lowest since March 4, fearing the biggest one-week decline since March 2020. Intel fell 2.6%, down three days in a row and the lowest since Jan. 27. AMD fell 2.9%, the lowest since March 8. Nvidia fell 3.8%, erasing all of its April gains. TSMC fell 4.1%, the lowest since Dec. 29 last year, while Applied Materials fell more than 7% and Chikinoptics dropped more than 10%.

News that Malaysia is closed to the country from today due to the intensification of the new crown epidemic, or again affect the semiconductor industry. Foxconn’s India factory cut iPhone 12 production by more than 50% due to mass infection of employees.

Banking, energy and oil sectors originally higher during the day, U.S. stocks turned down together at the end of the day, Goldman Sachs fell more than 1%, but Occidental Petroleum maintained a gain of more than 2%. Analysis says these sectors perform better in a hyperinflationary environment.

Other stocks that moved more included.

Virgin Galactic fell more than 11% to its lowest since Sept. 24 of last year, as two of Wood’s sister Cathie Wood’s ETFs almost liquidated their holdings in it. Vaccine stock Novavax fell nearly 8% to its lowest in four months, and JPMorgan downgraded its rating to “neutral”. Hertz Rent-A-Car’s U.S. stock pink sheets surged 55% to return to $6 at one point, announcing that it ended its plan to file for Chapter 11 bankruptcy and accepted Knighthead-Certares’ buyout offer. Ireland’s UDG Healthcare European shares jumped nearly 21% to be acquired by private equity firm Clayton, Dubilier &Rice for $3.7 billion. Commerzbank European and U.S. shares both rose more than 6% after first-quarter earnings beat expectations and raised full-year revenue guidance.

Most Chinese stocks fell, overall relatively resilient compared to the broader U.S. stock market. XtrackersHarvest CSI 500 Index ETF rose 0.09%, DB Harvest CSI 300 Index ETF fell 0.46%, China Technology Index ETF fell 0.5%, and China Internet Index ETF fell 1.58%. Futu Securities fell more than 14%; Waterdrop dropped nearly 10%, with a cumulative drop of more than 40% in its 4 trading days on the market. Highway (Follow the Leader) fell more than 7% as UBS 13F reported that it reduced its holdings in Follow the Leader in the first quarter for the first time in seven quarters.

European stocks closed higher supported by better local economic data and positive company earnings reports. The EU released its spring economic forecast report, raising this year’s eurozone GDP forecast to 4.3% from 3.8%. British stocks rose in country-specific indices after Prime Minister Johnson said he hopes to end proposals on working from home on June 21.

The pan-European STOXX 600 index closed up 0.30% at 437.93 points, reapproaching the closing high set on Monday. Oil and gas stocks led the broader market with a 2% gain due to higher oil prices, while technology stocks fell 1.4%. ICE EU carbon emissions trading permits (futures prices) rose more than 3% to hit a new record high.

Mike Bailey, head of research at FBB Capital Partners, told the media that the U.S. CPI data created the impression that the U.S. economy is overheating and just a step away from Fed tightening, putting pressure on stocks in the short term; however, the rise in inflation may be a temporary phenomenon, and the market will eventually return to the path of more optimistic expectations of moderate economic growth and lower risk of Fed tightening The market will eventually return to the more optimistic path of moderate economic growth and low risk of Fed tightening until a full recovery is achieved.

Inflation rises, 10-year U.S. bond yields forced 1.70% to a one-month high

The U.S. Treasury auctioned $41 billion of 10-year Treasury bonds on Wednesday, the bid rate and bid multiples are showing market demand to a new high of several months, 10-year U.S. bond yields fell back 2 basis points in the short term; the highest upward movement of 7.3 basis points during the day due to CPI inflation data, the daily high broke through 1.69%, forcing 1.70%, to a one-month high since April 13.

The 30-year U.S. bond yield rose as much as 6.8 basis points to a daily high of 2.42%, a new high since April 1. Long bond yields rose significantly higher than the short end of the curve, with the U.S. bond yield curve steeper, highlighting the inflationary logic. The U.S. 10-year TIPS break-even inflation rate of 2.587% was at an eight-year high.

During the U.S. session, the 10-year German bond yield rose four basis points for six days, the longest streak since Feb. 8, rising to the highest intraday since May 2019. the 10-year British bond yield rose more than five basis points, the largest gain in two months. Money markets expect the Bank of England to raise interest rates to 0.25% by September 2022.

Tighter monetary policy is expected to make the dollar soar on forcing 91, ethereum to another record high market capitalization over the small mo

The ICE US Dollar Index (DXY), which tracks the US dollar against a basket of six major currencies, rebounded from yesterday’s near three-month low and rose as much as 0.7% during the day, not only holding steady at 90 but also pushing the 91 mark, on expectations that high inflation will lead to an early tightening of monetary policy by the Federal Reserve.

The euro fell 0.6% against the dollar and fell below 1.21, while the pound fell to 1.41 against the dollar, still close to a three-year high. The dollar rose nearly 1% against the yen and regained 109 to hit a more than one-week high. Commodity currencies slipped against the dollar reversing yesterday’s gains.

The second-largest market capitalization of Ether (ETH) touched an all-time high of nearly $4,400 after once falling below the $4,000 mark, having risen above $4,200 for the first time on Monday and three days in a row to a record high, up more than 50% this month, with market capitalization surpassing $500 billion, surpassing JPMorgan Chase.

Bitcoin, the largest cryptocurrency in terms of market value, fell 5% and fell below $54,000 at one point, and had stood at $58,000 during the Asian session, with a maximum intraday amplitude of over $4,400. The price ratio of ethereum to bitcoin was the highest since June 2018 as bitcoin fell.

Higher U.S. bond yields depress gold as domestic and foreign metals fall in general, with copper falling to an all-time high

COMEX June gold futures closed down 0.7% at $1,822.80 per ounce on Wednesday, down for a second straight day, having halted a four-day rally on Tuesday and hitting its highest since February this year for three straight days on Monday.

Spot gold in the U.S. late losses expanded, the deepest drop of $ 22 or down 1.2%, the daily low fell below $ 1815, giving back all the gains since May 7, Monday had risen above $ 1845 to a three-month high. Spot silver fell 2% but stood firm above $27.

Analysts said gold rose more than 3% last week and rose above the key $1,800 level, weak non-farm payrolls and inflation fears favor gold, as the latter is seen as a hedge against high inflation, but the U.S. bond yields up today has hurt the attractiveness of gold that does not provide yield.

Domestic base metals were generally lower overnight. Shanghai copper closed down 0.54%, losing the 76,000 yuan mark, having broken through 77,000 yuan on Monday to hit a 16-year high. Shanghai aluminum closed down 1.13%, having hit a thirteen-year high of 20,400 yuan on Monday. Shanghai zinc, Shanghai lead and Shanghai tin all fell more than 1%.

London base metals closed lower across the board on Wednesday, with LME copper futures closing down $14 at $10,446 per tonne, closing above $10,000 for the fifth consecutive day, but worse than the closing high set on Tuesday. Lunar aluminum fell for a third straight day, deviating further from a three-year high.

Domestic chemical futures surged in the overnight session, with Zheng alcohol up more than 6% and agricultural commodities generally up, with iron ore up 42.8%, thread up 44.4%, glass up 56% and pulp up 24% so far this year. Platts 62% iron ore closed flat, hovering at an all-time high.

IEA says oil market is no longer oversupplied, international oil prices rose for four days in a row, forcing $70 on the cloth oil

“WTI June crude futures closed up $0.80, or 1.22%, at $66.08/barrel. Brent July crude oil futures closed up $0.77, or 1.12 percent, at $69.32/barrel.

U.S. oil WTI rose as high as $1.34 or 2.1% during the day, once rising above $66 to a new one-week high. International Brent also rose as high as $1.34 or up 2%, not only back to $69, but also once on forcing the $70 mark, with a new one-week high. NYMEX June gasoline futures rose as high as 2%, once surpassing $2.18 per gallon, the largest U.S. fuel pipeline network Colonial Pipeline shutdown into the sixth day, some areas into “gasoline panic” as retail gasoline prices hit a seven-year high.

In news, U.S. EIA oil inventories fell back as expected last week, and U.S. oil exports fell 2.3 million barrels per day and hit the largest one-week decline in history. Accelerating economic recovery and optimistic expectations of energy demand are both involved in pushing up oil prices, with the International Energy Agency IEA releasing its monthly report saying that oil demand has outpaced supply and the supply-demand gap in the oil market will still widen as vaccinations and the global economy rebound.