월스트리트저널 읽기 - Treasury Yields, Cisco, Higher Rates etc.

FRIDAY, SEPTEMBER 22, 2023

 

◈ Treasury Yields Surge To Decade-Plus Highs(국채수익률이 10년 이상 최고치로 급등)

 

 

The highest bond yields in more than a decade prompted another stock-market selloff Thursday, as the possibility of a prolonged higher interest-rate environment sank in across Wall Street.

 

The S& P 500 fell 1.6% on Thursday, as all 11 sectors finished lower. The tech-heavy Nasdaq Composite fell 1.8%, while the blue-chip Dow Jones Industrial Average dipped 1.1%, or around 370 points. All three indexes are on pace to finish the week in the red.

 

A selloff in government bonds, prompted by surprisingly strong economic data, sent yields higher. The yield on the 30-year Treasury bond rose to 4.55%, the highest level since 2011 and its largest one-day increase since June 2022. The yield stood at 4.398 Wednesday. The 10-year Treasury yield settled Thursday at 4.479%, the highest since 2007. The two-year yield rose to 5.148%, its highest reading since 2006.

 

◈ Cisco to Acquire Splunk In $28 Billion Cash Deal(시스코, 280억 달러 현금 거래로 Splunk 인수)

 

 

Cisco Systems has struck a $28 billion deal to buy analytics and security-software company Splunk as the networking- equipment giant looks to tap further into the rise of artificial intelligence.

 

The deal will create one of the world’s largest software companies, Cisco said, and will immediately boost its cash flow in the first year after closing, which is expected by the end of September 2024. The combination will expand Cisco’s software portfolio and produce more recurring revenue, it said, along with enabling Cisco to provide customers with AI and other tools to analyze their data and detect security threats.

 

Splunk, founded in 2003, makes software used by companies’ information-technology and security operations to monitor and analyze data. Cisco sells network equipment such as routers and switches, and provides security services as well as software products.

 

◈ Higher Rates Not Just for Longer-Maybe Forever(더 높은 금리는 단지 장기간이 아니라 아마도 영원히 지속될 수도 있습니다)

 

 

On Wednesday, Federal Reserve officials surprised markets by signaling interest rates won’t fall as much as previously planned.

 

The tweak might be more important than it looks. In their projections and commentary, some officials hint that rates might be higher not just for longer, but forever. In more technical terms, the so-called neutral rate, which keeps inflation and unemployment stable over time, has risen.

 

This matters to any investor, business or household whose plans depend on interest rates over a decade or longer. It could explain why long-term Treasury yields have risen sharply in the past few months, and why stocks are struggling.

 

The neutral rate isn’t literally forever, but that captures the general idea. In the long run neutral is a function of very slow moving forces: demographics, the global demand for capital, the level of government debt and investors’ assessments of inflation and growth risks.

 

◈ BOE Leaves Rates Steady, in a Departure(BOE는 금리를 안정적으로 유지한다)

 

 

The Bank of England left its key interest rate unchanged for the first time since November 2021 amid signs inflation is cooling and the U.K.’s economy is teetering on the brink of contraction.

 

The BOE’s decision to keep its benchmark rate at 5.25% leaves it out of step with a number of other European central banks that have continued to raise their key rates at recent meetings of policy makers.

 

The pound weakened slightly against the dollar.

 

Earlier on Thursday, the central banks of Sweden and Norway matched last week’s move by the European Central Bank in raising their key rates by a quarter of a point to 4% and 4.25%, respectively. They both signaled a further increase was possible. By contrast, Switzerland’s central bank surprised economists by leaving its key interest rate at 1.75%.

 

The BOE decision to hold rates came a day after U.K. inflation unexpectedly fell in August to 6.7% from 6.8% in July, despite climbing energy prices. Core inflation, which excludes volatile food and energy prices, also fell to its lowest level since January.

 

◈ Warehouses Escape Real Estate's Slump(부동산 침체를 탈출한 창고들)

 

 

Companies from e-commerce retailers to third-party logistics providers are leasing less new warehouse space amid weak freight demand, high interest rates and shifting consumer spending.

 

But the industrial real-estate market hasn’t completely cooled off after three years of frenetic expansion. The amount of storage available remains historically tight, industry experts say.

 

The industrial market is “starting to slow,” said Matt Dolly, research director of real-estate services firm Transwestern. “I’m not going to say the brakes are on, but the foot might be off the gas and maybe they’re in cruise control.”

 

Companies rushed to add hundreds of millions of square feet of warehouse space from 2020 through 2022 to meet pandemic-driven e-commerce demand. Those decisions drove the nationwide vacancy rate down to nearly 3% as of late last year, and some markets such as Southern California were effectively full.

 

 

오늘도 경제신문으로 세상을 봅니다.