US Equities Rally as Yields Plunge
24 June 2022
US stock markets found some late buyers on Thursday, pushing US indices 1% higher on the day, with the positive momentum seen during the London session on Friday as well.
When writing, stock futures are up more than 1%. On the other hand, EU bourses remain more cautious, with the German DAX down 0.2%, while the French CAC was advancing only 0.4%.
Slowing growth worldwide
On Thursday, a 16-month low in EU economic activity, reflected in the EU's flash S&P Global PMIs for June, provided a bleak picture of the region's future. Moreover, in June, the US manufacturing index fell to 52.4, a nearly two-year low, while the services PMI decreased to 51.6 from 53.4 in May, a five-month low.
As a result, US bonds rallied sharply, pushing their yields notably lower as investors rushed into safe have assets. As a result, the 2-year yield dropped below the critical 3% threshold, while the 10-year declined toward 3%.
Additionally, Michelle Bowman, governor of the Federal Reserve, stated on Thursday that it would be reasonable to raise rates by another 75 basis points (bps) in July and by at least 50 bps over the course of the following several sessions.
Later today, the US Census Bureau will release the May New Home Sales statistics, while the University of Michigan will publish the final revision to the June Consumer Sentiment Index.
Elsewhere, industrial commodities, along with precious metals, remain offered as investors are pricing in a global recession. Copper has been down nonstop since its June highs, losing 20% in three weeks. silver dropped to one-month lows below 21 USD and gold dropped closer to 1,800 USD.