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23/08/
2023

Today’s Announcements & News

Asia

Asia-Pacific markets are experiencing mixed movements as they respond to the recent surge in U.S. Treasury bond yields, which have reached levels not seen in over a decade.

In Japan, the Nikkei 225 index continued its positive momentum from the previous day, climbing by 0.97% to close at 31,856.71. The broader Topix index also saw gains, rising by 1.08% to end at 2,265.71.

South Korea’s Kospi index posted a modest gain of 0.28%, closing at 2,515.74, while the Kosdaq, which tracks smaller-cap stocks, increased by 0.52% to finish at 893.33.

Australia’s S&P/ASX 200 index hovered just above the flatline, ending the day at 7,118.9.

In Hong Kong, the Hang Seng index managed to break a seven-day losing streak, gaining 1.07% in its final hour of trade.

On mainland China, the CSI 300 index recorded a 0.77% increase, closing at 3,758.23.

The common thread among these markets is the impact of rising 10-year U.S. Treasury note yields, which have surged to their highest level since November 2007. Higher bond yields typically exert downward pressure on stock prices, and this influence is being observed in various markets. However, some indices, like Japan’s Nikkei, have still managed to post gains.

US

On Tuesday, the S&P 500 index experienced a slight decline of 0.3%, closing at 4,387.55. The Dow Jones Industrial Average also saw a decrease, falling by 174.86 points, or 0.5%, to end the day at 34,288.83. Meanwhile, the Nasdaq Composite managed to eke out a small gain, closing at 13,505.87.

One of the key factors influencing market sentiment was the concern over rising Treasury yields. Investors are closely monitoring developments ahead of a significant speech later in the week by Federal Reserve Chairman Jerome Powell. Additionally, the financial sector faced challenges, with several regional and larger banks experiencing credit rating downgrades and revised outlooks, leading to a 0.9% decline in the sector. Notable banks like KeyCorp and Comerica saw a 4.1% drop, while JPMorgan Chase fell by 2.1%.

The retail sector also faced headwinds, as Dick’s Sporting Goods and Macy’s both issued cautious full-year forecasts, resulting in significant stock price declines of 24% and 14%, respectively. This downturn in retail had a broader impact, negatively affecting the SPDR S&P Retail ETF. Dow component Nike experienced its ninth consecutive daily loss, sliding by more than 1%.

The recent focus of Wall Street has been on the bond market, particularly the 10-year Treasury yield, which reached its highest level since 2007. On Tuesday, the 10-year yield eased slightly to 4.33%, but the bond market’s behavior continues to be closely monitored by investors.

Commodity

Oil prices fell on Tuesday due to concerns about China’s economic slowdown, which could impact demand from the world’s largest crude importer. Brent crude settled down 43 cents at $84.03 a barrel, while U.S. West Texas Intermediate (WTI) for October delivery slipped 48 cents to $79.64 a barrel.

Gold prices remained near a five-month low as a stronger dollar and higher bond yields reduced demand for the precious metal. Spot gold inched up 0.2% to $1,897.60 per ounce, while U.S. gold futures settled 0.2% higher at $1,926.00 per ounce.

Benchmark 10-year U.S. Treasury yields eased slightly but remained near 15-year highs. The stronger dollar also contributed to gold’s limited gains by making it more expensive for holders of other currencies.

The above analysis is only for the views of market researchers and is for reference only and is not regarded as a specific investment suggestion.

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