News & Analysis

Overnight on Wall Street: Thursday 13 May 2021

13 May 2021 By Lachlan Meakin

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Equity Markets

The Dow Jones suffered its worst day since January and worst three-day streak in 7 months.

  • Dow Jones down 681 (1.99%)
  • NASDAQ down 357 (2.67%)
  • S&P 500 down 89 (2.14%)
  • Russell 2000 down 72 (3.26%)

High growth and tech stocks with inflated PE figures were hard hit as investors questioned their valuations on the back of these higher-than-expected inflation numbers.

Economic Announcements

US CPI figures showed that the consumer price index rose 4.2% from a year ago, compared with average economists’ estimates of a 3.6% increase.

This was the highest rate in 13 years, resurrecting fears that the Federal Reserve may need to bring forward tapering of its easy-money policies.

Tonight, we have what will be a closely watched 10-year bond auction after yesterday’s inflation figures. The benchmark 10-year yield spiked to over 1.7%, its highest level since March after the CPI release and traders will be paying close attention to tonight’s auction to see how the bond market reacts.

FX Markets

Unsurprisingly, the US dollar surged after the CPI figures were released with the chance of a rate tightening cycle starting sooner than previously expected.

AUDUSD had its biggest down session in 6 weeks as a surging US dollar and rotation out of risk on currencies pushed the pair back down into it 0.76 – 0.78 range where it has spent most of 2021.

FX traders will be looking ahead to tonight bond auction for further clues on the US dollar short term direction.

Cryptos

An Elon Musk tweet caused a steep decline in Bitcoin (BTCUSD) overnight, announcing that Tesla (TSLA) would stop accepting it for car purchases due to environmental concerns.

The whole crypto complex was dragged down with BTC. Ethereum which has been the strongest performing major altcoin recently had its biggest intraday drop since February before dip buyers appeared pushing its price back up to near $4000 per token at the time of writing.

Friday, 14 May 2021 – Indicative Index Dividends
Dividends are in Points

SymbolDividend
ASX2000.058
WS3011.58
US5000.294
US20000.151
NDX1001.358
CAC400.386
STOXX500
ESP350.495
ITA400
FTSE1000
DAX300
HK500
JP2250
INDIA500

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Disclaimer: Articles are from GO Markets analysts and contributors and are based on their independent analysis or personal experiences. Views, opinions or trading styles expressed are their own, and should not be taken as either representative of or shared by GO Markets. Advice, if any, is of a ‘general’ nature and not based on your personal objectives, financial situation or needs. Consider how appropriate the advice, if any, is to your objectives, financial situation and needs, before acting on the advice. If the advice relates to acquiring a particular financial product, you should obtain and consider the Product Disclosure Statement (PDS) and Financial Services Guide (FSG) for that product before making any decisions.