Stock indices finished today’s trading session in the green, as the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) gained 0.49%, 0.63%, and 0.59%, respectively.
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The financial sector (XLF) was the session’s laggard, as it gained 0.02%. Conversely, the energy sector (XLE) was the session’s leader, with a gain of 3.37%.
Furthermore, the U.S. 10-Year Treasury yield decreased to 4.64%, a drop of 15 basis points. Similarly, the Two-Year Treasury yield also decreased, as it hovers around 4.93%.
Last updated: 2:30PM EST
Stocks have recovered from their early losses to turn positive on the day. This is despite Morgan Stanley’s warning of potential turbulence ahead for the S&P 500, observing that despite a handful of mega-cap tech stocks driving gains, the average stock remains roughly stagnant. The data suggests over 60% of the S&P 500 lies beneath the 200-day moving average, signaling broader market weakness.
The firm also noted concerns about the U.S. Treasury issuing nearly $2T in bonds amidst reduced foreign demand and the Fed’s withdrawal from quantitative easing, leaving analysts questioning who’ll be the primary bond buyers.
Meanwhile, Goldman Sachs economists, while acknowledging the drag on the economy due to rising interest rates, don’t see it as a straight road to recession. They predict a 0.5% dent in growth over the upcoming year, which, though significant, isn’t severe enough to herald a recession. They also spotlight risks in financial and corporate sectors, including the challenging landscape of supporting unprofitable companies and the worsening projections of the federal debt-to-GDP ratio.
However, Goldman Sachs remains optimistic, believing that should these risks mount aggressively, the Federal Reserve might intervene with interest rate cuts to mitigate the impacts.
Last updated: 11:32AM EST
Stocks remain in the red so far in today’s trading session. Earlier today, Dallas Fed President, Lori Logan, voiced her thoughts on the inflation landscape. According to her, maintaining restrictive financial conditions is vital for achieving the Federal Reserve’s 2% inflation target.
The need for further interest rate hikes, however, is contingent on the elements pushing up long-term interest rates. Logan pointed out that if the spike in these rates stems from economic strength, the FOMC might have to up the ante.
The labor market’s heat plays a pivotal role in shaping inflation. Although not as robust as a year ago, job openings currently outstrip the available workforce, leading to faster wage growth than what would align with 2% inflation in the long run.
Logan cautioned against being too optimistic about inflation slowing, emphasizing the ongoing challenge of securing its descent to a sustainable 2%. She underscored the importance of remaining vigilant, stressing that runaway inflation could jeopardize the Fed’s objectives.
Last updated: 9:30AM EST
Stocks opened lower on Monday morning after the surprise attack on Israel by Hamas militants. The Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) are down by 0.99%, 0.46%, and 0.47%, respectively, at 9:30 a.m. EST, October 9.
First published: 4:11AM EST
U.S. Futures are trending down on Monday morning as markets worldwide fret over the current geopolitical condition in Israel. Futures on the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) are down by 0.76%, 0.82%, and 0.76%, respectively, at 4:00 a.m. EST, October 9.
Hamas’ attack on Israel adds to the uncertainty of the macro backdrop, which is already reeling from the effects of higher interest rates and persistent inflation. Meanwhile, oil prices started surging on the news of the war as traders worried about the pressure on the oil supply. WTI crude oil futures were floating near $85.81 per barrel as of the last check. Also, the U.S. 10-year treasury yield was 4.79% at the time of writing.
All three major indices ended the prior week on a positive note, despite the stronger-than-expected nonfarm payrolls data released on October 6. The U.S. added 336,000 jobs in September, against the expectation of adding 160,000 jobs. Even so, the unemployment rate stayed unchanged at 3.8%, fuelling optimism that inflation could be cooling. Also, the Federal Reserve’s minutes from September’s FOMC meeting will be released on Wednesday, along with the Producer Price Index (PPI) data. Importantly, traders await the all-important Consumer Price Inflation (CPI) data on October 12.
The most noteworthy earnings coming this week are the reports of PepsiCo (PEP), Delta Air Lines (DAL), Wells Fargo (WFC), BlackRock (BLK), Citigroup (C), and UnitedHealth Group (UNH). Further, data from the China Passenger Car Association (CPCA) showed that Tesla’s China-made EV sales declined in September, while rival BYD continues to impress. In the meantime, the United Auto Workers (UAW) union is stressing the inclusion of battery plant workers in their negotiations with General Motors (GM), Ford (F), and Stellantis (STLA). The ongoing labor strike has entered its fourth week with little respite in sight.
Elsewhere, European indices are trading mixed on Monday morning amid the tensions rising from the Middle East. The sudden war between Palestine and Israel has caught global nations off-guard.
Asia-Pacific Markets End Mixed on Monday
Asia-Pacific indices ended mixed today as markets assessed the unsettling situation in the Middle East. Chinese markets resumed trading today after a four-day extended holiday. In the meantime, Japanese markets remain closed for trading today.
Moreover, Hong Kong’s Hang Seng index ended higher by 0.16% after remaining open for trading only in the second half. At the same time, China’s Shanghai Composite and Shenzhen Component indices ended down by 0.44% and 0.03%, respectively.
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