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Stocks fall with rising oil price, bond yields dip, gold up

oil and stocks

Asia markets are set to open lower following losses in the US markets overnight. Inflation concerns returned as oil prices rose after a sharp pullback earlier in the month. The US bond yields dipped on fading risk-on sentiment.

SPI futures are indicating a 0.7% drop at the start of trade in Australia and the NZX 50 was down 0.3% in the first hour of trading.

US and EU stocks

The Dow Jones Industrial Average fell 1.29%, the S&P 500 declined 1.23%, and Nasdaq was down 1.32%.

The mega-caps mostly closed in red, with Microsoft, Alphabet, and Meta Platforms all down more than 1%, while Apple and Tesla finished higher. 

The financial sector fell on the falling bond yields. JP Morgan Chase fell 1.7%, Citigroup was down 1.6%, and Wells Fargo slumped 4%. The bank stocks were shattered since the Ukraine-Russia war started due to their exposure to Russia. Citigroup shares, holding about US$100 billion of the Russian bonds, plunged 23% from the February high. 

Energy stocks resumed gains on the rising oil prices, with Occidental and Chevron, and Devon Energy all closing in green. 

The meme stocks rocketed for the second straight trading day, with Gamestop up 14.4%, and AMC Entertainment surging 13.6%, sparked by the Reddit post that suggested some of these stocks were reaching the bottom.

On the earnings front, General Mills rose 2% after the company reported stronger-than-expected quarterly earnings. Adobe shed 9% on the weak second quarterly guidance.

European stocks all finished lower, with Euro Stoxx 50 down 1.45%, DAX losing 1.31%, and CAC 40 falling 1.17%. The FTSE 100 dipped 0.22%.

Treasuries

The US treasury yields dipped on Wednesday but still traded at the highest level since May 2019. The 10-year US Treasury yield fell to 2.30%. The 2-year Treasury yield was lower and traded at 2.1%.

In Europe, Germany 10-year Bond Yield fell to 0.46%, and the France 10-year Bond Yield was lower at 0.92%. The UK 10-year Gilt yield was down to 1.62%.

Commodities

Oil prices were up for 4 trading days in the past 5 sessions. The oil prices recovered 60% of the losses from early March amid ongoing uncertainty towards the Russia Ukraine war. US President Joe Biden said he planned for more sanctions on Russia in the G7 Brussels summit.

The WTI futures jumped 5.06%, to US$114.31 per barrel, and the Brent crude was up 5.83%, to US$121.31 per barrel.

Precious metals rose as falling risky assets were demanded for the hedging activities. The NYMEX gold futures bounced US$22.65, to US$1,944.15 per ounce. Silver advanced 1.54%, to US$25.28per ounce.

Currencies

Commodity currencies, including AUD, NZD, and CAD, continue to rise against most of the other currencies on the strong commodity prices. At the same time, Eurodollar, Swiss Franc, and British Pound weakened against the USD due to the geopolitical tensions. Japanese Yen softened further against the other major currencies due to the dovish BOJ’s stance and rising US bond yields.

Cryptocurrencies

The global crypto market cap had little changes on Wednesday, stayed at US$1.93 trillion. Both Bitcoin and Ethereum dipped slightly. Bitcoin fell to US$42,270, and Ethereum was at US$2,970 by the press time. Cardano jumped further, up 10.74%, to US$1.07 in the last 24 hours. 


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