Inflation’s impact on the capital markets is painfully apparent this morning.
With the recent sobering news that the Consumer Price Index (CPI) topped 7% for December, bond and stock prices have been sliding faster than attendance at the upcoming Winter Olympics. And most especially today.
The 10-year Treasury yield Tuesday morning jumped to 1.85%, from 1.77% on Friday. It started the year at 1.55%. Markets were closed Monday for Martin Luther King Jr.’s birthday. The two-year T-note yield climbed above 1% for the first time since February 2020, right before the pandemic swept over the world.
The S&P 500 is down 1.5% this morning, pushing the loss for the year to 3.6%. Tidings are similarly grim at the tech-heavy Nasdaq Composite, off about 2% today.
Microsoft, up by almost a third over the past 52 weeks, saw its stock slip 1.5% after the tech giant announced a $68.7 billion acquisition of gaming powerhouse Activision Blizzard. And while financial stocks have been doing pretty well, Goldman Sachs Group’s shares plummeted 8% amid a fourth quarter trading revenue dip, below analysts’ projections.