Stocks, Bonds, Oil Look Down

Barry Adams
15 Sep, 2022
New York City

Global markets remain defensive as nervous investors digest implications of higher rates and economic slowdown. 

Economic slowdown worries spilled over energy markets and crude oil prices eased in New York and in European trading. 

Weakening economic backdrop and stubborn inflation has also lifted bond yields around the world. 

 

Bond Market Rout Deepens 

The yield on 10-year U.S. Treasury bonds are above 3.45% and approaching the peak of 3.5% reached in June and 2-year notes are now at 3.8%, a 15-year high. 

In addition, the bond yields in Germany are at 1.7%, a 8-year high, as the deepening energy crisis shows no sign of easing. Yields in Greece and Italy are above 4%, prompting worries of another sovereign debt crisis in the eurozone. 

 

Crude Oil Searches Bottom

Global market sentiment has been weakening on the extended coronavirus lockdowns and housing market problems in China, natural gas crisis in Europe, and escalating interest rates in the U.S. 

Moreover, shifting of Russia's oil supply to Asia and a conflict between Armenia and Azerbaijan has kept the supply worries in front and center. 

WTI crude oil price eased $1.20 to $87.22 a barrel and Brent crude price declined $1.40 to $92.71. 

Surging energy costs also negatively impacted trade balance for the eurozone. 

 

U.S. Stocks Trade with Downward Bias 

In New York, benchmark indexes traded down between 0.3% and 0.5% and tech stocks led the decliners in early trading. 

Railroad stocks traded higher after President Joe Biden announced a preliminary agreement for a better pay and working conditions for railroad workers. 

The agreement is likely to avert the strike for now and disruptions in services. 

In corporate news, Adobe dropped nearly 10% after the company announced a deal to acquire cloud-based software design company Figma Inc for $20 billion  in cash and stock. 

Danaher Corp jumped 3% after the medical technology and industrial products maker said it plans to separate its environment and science applications division as a separate company in the last quarter of 2023. 

 

Eurozone Swings to Trade Deficit  

The euro area trade balance swung to a merchandise trade deficit of