June 29 New York

The DJIA plunged by 167.58 points to 21287.03 while the S&P 500 Index fell by 20.99 points to 2419.70.  Nasdaq Composite Index plunged by 90.063 points to 6144.351 while the Nasdaq 100 Index plummeted by 100.011 points to 5653.021.  The yield on 10-year Treasury gained by 3.9 basis points to 2.267 percent.  U.S. banks cleared the Fed’s stress test, which led to massive share repurchase programs.  JP Morgan Chase gained 1.48 percent to $91.15 while GS added 0.53 percent to $224.41.  The yen strengthened against the U.S. dollar a bit.  WTI crude futures were little changed at $44.93 a barrel.  Oil is up more than 4 percent this week with prices climbing as government data showed a drop in U.S. gasoline supplies that have remained stubbornly high at the start of the summer driving season.  The Nasdaq 100 plunged 1.7 percent to a seven-week low on Thursday as investors rotated into banks.  Hawkish rhetoric from global central bankers has rewritten the script for where interest rates and long-term yields may be heading across a host of major economies.  10-year bond yields in the U.S., Germany, England, and Canada all marched higher on Thursday, amid the retreat in risk assets.  Volatility, absent for much of the year, is back as the debate on normalizing central bank policy intensifies after nine years of unprecedented stimulus.  That suggests some investors are growing concerned about the economy’s ability to withstand a tightening cycle.  Technology stocks remain under pressure, while banks have been supported on the prospect for higher rates.  Still, global equities are poised for an eighth month gains that pushed stocks to a record high at the beginning of last week.  U.S. stock investors have been putting their faith in the robustness of earnings as the economy continues its recovery, shrugging off a host of worries from oil’s slump into a bare market to political wrangling in Washington.  Bond fund managers, concerned about slowing inflation, will be watching key inflation data due out on Friday in the U.S.

Kazuhide Matsuishi

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