• Vince

Big sell-off on Techs from Wall Street, Bond yields rising

A sizable big sell-off in tech shares hit Wall Street overnight. The Nasdaq fell as much as 3% as rising global interest rates weighed on risk assets, and many shifted their focus away from companies that have benefitted from the pandemic, and towards securities poised to benefit from the end of lockdown and the easing of restrictions. While the tech-heavy Nasdaq was the biggest loser, the Dow fell 1.6% and the S&P 500 was 2.2% lower. The ‘Gamestop’ saga is still running its course, with the Reddit-favored share making a comeback. European shares were also generally lower overnight, though the moves were not as dramatic.

Bond yields continued their climbs overnight, with some sizeable lifts in yields. With economic data proving resilient and investors increasingly pegging higher inflation, global bond yields were higher virtually everywhere in North America and Europe, continuing the trend that was evident in the local market yesterday. The move was most dramatic for the US 5-year Treasury yield, which reached a one-year high at 0.79%, and the US 10-year yield also rose to its highest levels since February 2020, at 1.60%. Yields were similarly up across the curve in Europe.

The market moves are being driven in part by the latest US economic data, which has been strong. Overnight, data prints showed US durable goods orders surged 3.4% in January, well ahead of expectations (mkt: 1.1%). Jobless claims also fell to a three-month low at 710k well down from 841k a week ago and below expectations (mkt: 825k), though the outright number of unemployed remains high at 19m. Fourth-quarter US GDP was also revised up slightly to 4.1% qoq annualised, in line with expectations.