Stocks Fall Sharply As U.S. yields jump to 3-year highs
3:51 pm Monday, April 11th, 2022
A gauge of global stocks skidded on Monday, pulled lower by technology shares, as U.S. Treasury yields marched higher ahead of inflation data that could prompt the Federal Reserve to tighten policy enough to slow a rebounding economy.
The 10-yr Treasury note yield is currently up six basis points to 2.77% (+44 bps this month and +126 bps this year), which has festered valuation concerns, particularly for the mega-cap/growth stocks that tend to be more highly valued.
Accordingly, the Vanguard Mega Cap Growth ETF (MGK) is down 2.2%, the S&P 500 information technology sector is down 2.3%, the Philadelphia Semiconductor Index is down 1.8%, and the ARK Innovation ETF (ARKK) is down 1.6%.
The energy sector (-2.9%), though, is the weakest S&P 500 sector as crude prices fall below $95.00 per barrel ($94.42, -3.83, -3.9%). The decline in oil is being attributed to growth/demand concerns as Shanghai remains in COVID lockdown mode.
Conversely, the industrials (+0.1%) and consumer staples (+0.1%) sectors are trading fractionally higher in an otherwise negative session.
From a technical standpoint, while the S&P 500 has dipped further below its 200-day moving average (4494), the benchmark index has found some support at its 50-day moving average (4427). A violation of that level could trigger some selling algorithms.
AT&T (T), meanwhile, is having a great day with a 7% gain. The company completed its planned spin-off of its WarnerMedia segment, The Wall Street Journal reported AT&T is aiming to increase prices and reduce costs, and JP Morgan upgraded the stock to Overweight from Neutral.
Investors did not receive any economic data today, but there is some nervousness for the March Consumer Price Index tomorrow morning after China reported hotter than expected inflation figures for March.
