Originally published by Rivkin Securities
US stock markets had another relatively flat to negative session with the Dow Jones Industrial Average closing flat while the S&P 500 was down 0.3%. Amazon (NASDAQ:AMZN) reported its fourth quarter results which showed that both revenue and earnings per share beat expectations. The report caused the share price to jump from its lows of the day taking it in after-hours trading from being down 4.0% to up 1.1%. The S&P/ASX 200 had a strong day yesterday, climbing 0.9% and regaining the losses from earlier in the week.
US bond yields continue to rise, with the 10-year yield now at 2.79%. This represents a 38-basis point increase over the last month, a very rapid increase for bond yields. The Australian 10-year bond yield, however, is holding firm at 2.80% and therefore marks the point at which the US and Australian bond yields are now virtually equal. This hasn’t happened since 2000 and at some point should start to have an effect on the Australian dollar. In fact, the AUD/USD dropped below US$0.80 briefly last night before recovering to US$0.804. The US 30-year bond yield broke through the 3.0% level last night for the first time since May 2017. The rapid rise in bond yields has so far not had a substantial effect on equity prices although theoretically higher rates tend to push equity valuations lower.
The (Bitcoin) price has now decisively broken down through $10,000 per coin. A late bounce pushed the price back above $9,000 and at the close of the session the price settled at $9,145. The technical picture for bitcoin has weakened substantially over the last month as the upward momentum from 2017 has been halted.
Data Releases:
- US Employment Data 12:30 am AEDT