Proactive Investors -
- FTSE 100 down 11 points at 7,500
- Boohoo falls after cutting revenue forecasts
- Burberry slips as UBS downgrades to sell
US stocks slide as bond yields hit 16-year high
US stocks opened in the red as the bond sell-off resumed as investors grow increasingly worried about the long-term effects of higher interest rates.
Shortly after the opening bell, the Dow Jones Industrial Average was down 144.89 points, 0.4%, at 33,288.46, the S&P 500 was down 18.83 points, 0.4%, at 4,269.56 and the Nasdaq Composite was down 84.45 points, 0.6%, at 13,223.33.
The US 30-year yield rose to the highest level since 2007, and 10-year rates rose for a second day touching 4.74%.
There are concerns that higher rates will stop economic growth in its tracks, hurt the housing market and damage government finances.
Goldman Sachs (NYSE:GS) said a sharp rise in long-term interest rates combined with widening deficits and heightened fiscal discord in Congress has renewed questions about the sustainability of rising government interest costs.
It projects federal interest expense will rise from 2% of GDP in 2022 to 3% in 2024 and 4% by 2030, surpassing the early 1990s peak by 2025.
On average over the next decade, higher interest expense is likely to add an additional 0.3% of GDP to the annual deficit compared to its July projections.
As a result, Goldman has raised its deficit estimates for FY2024 by $50 billion to $1.7 trillion (6.0% of GDP) and FY2025 by $100 billion to $1.9 trillion (6.5% of GDP).
FTSE slips into the red as US bond yields jump (again)
Ahead of the open in the US and the FTSE 100 has slipped into the red, down 17 points at 7,493.
The falls come as the US 30-year yield rose to the highest level since 2007, deepening a bond sell-off driven by expectations the Federal Reserve will keep interest rates higher for longer.
It rose as much as seven basis points to 4.858%, exceeding its 2010 high of 4.8559%.
Meanwhile, the 10-year Treasury yield has risen to a fresh 16-year high - all contributing to US futures now pointing to a weak start on Wall Street.
Here’s a quick recap of the top risers and fallers on the junior market today
Oxford Biodynamics PLC (LON:OBD) saw its shares rise by 10% after the company received a unique reimbursement code for its EpiSwitch Prostate Screening (PSE) Test.
Shares of Renalytix PLC (LON:RENX) surged 28% after the Centers for Medicare & Medicaid Services (CMS) announced a price of $950 for the company's FDA-approved kidneyintelX.dkd test.
ADM Energy PLC (LON:ADME) shares rose 10% at one point, as the micro-cap oil and gas firm was boosted by a third-party transaction in Nigeria.
Gooch & Housego PLC (LON:GHH) shares climbed 7% after the photonic components maker reported that "trading momentum was sustained" in the second half.
Shares in Ascent Resources PLC (LON:ASCR), the oil and gas company, jumped close to 15% after it signed a collaborative agreement with MBD Partners, the European-based investment firm.
Safestyle UK PLC (LON:SFES) said it is actively engaging with existing shareholders and third-party investors to secure a working capital injection designed to stabilise its financial position. Shares opened 13% lower at 3.84p.
Shares of PCI-PAL PLC (LON:PCIPP), a provider of secure payment solutions, fell by 10% even after the company announced a victory in a UK High Court patent case against competitor Sycurio Limited. The court ruled strongly in favour of PCI-PAL, stating that Sycurio's patent claims were unfounded.