Morning Report 11 Feb 22: Wall St stung as inflation continues to rise

US sharemarkets were weaker on Thursday in response to higher-than-expected inflation data. So called 'megacap' technology stocks led declines. But shares in Disney rose 3.3% in response to earnings. And big banks, which tend to do better in a rising rate environment, out-performed. At the close of trade, the Dow Jones index was down by 526 points or 1.5%. The S&P 500 index lost 1.8%. And the Nasdaq index fell by 305 points or 2.1%.

US treasuries were lower on Thursday (yields higher) in response to higher-than-expected inflation data. Markets are pricing in a greater chance of a 50 basis point rate hike in March. Federal Reserve president James Bullard called for the federal funds rate to lift 100 basis points by July 1. US Treasury sold US$23 billion in 30-year bonds into weak demand at an average yield of 2.34%. US 10-year yields rose by 12 points to near 2.05%. US 2-year yields rose by 27 points to near 1.61%. Yields are trading at the highest levels in more than two years.

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