Last Updated 4:05 PM EST
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Stock indices finished today’s trading session in the green to end their recent losing streak. The Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) gained 0.46%, 0.4%, and 0.13%, respectively.
The consumer staples sector (XLP) was the session’s laggard, as it fell 0.34%. Conversely, the energy sector (XLE) was the session’s leader, with a gain of 1.23%.
Furthermore, the U.S. 10-Year Treasury yield increased to 4.54% along with the Two-Year Treasury yield, as it hovers around 5.13%.
Last updated: 2:19PM EST
Stock indices are mixed so far in today’s trading session. Jefferies strategists are bucking the trend in their recent analysis, suggesting that the prevailing high-interest rates aren’t the bad news for the S&P 500 that many fear. David Zervos, Jefferies’ chief market strategist, is of the viewpoint that even though investors might have to brace for a 75–100 basis point rate reduction in 2024 not happening, this tighter fiscal environment might just go hand-in-hand with an uplifting U.S. economic projection.
Reflecting back, Jefferies’ research underscores that when Fed rates were around 5-6% between periods 1995-1998 and 2006-2007, the S&P 500 achieved stellar returns. Diving deeper into past patterns, equities showed an impressive run until the 10th month during the 2006–2007 cycle, scoring a 20% return before tapering off to 16% in the cycle’s tail-end.
Industries like software, tech hardware, and pharmaceuticals were the top runners during these steady rate periods. The present rate scenario draws parallels to the onset of 1995: rates before 1994’s hikes hit a 30-year trough, and the 1995 rate acceleration mirrors the trends observed in 2022. Moreover, these hikes didn’t trigger a recession. Instead, the market experienced a “soft landing,” punctuated with minor rate alterations.
Last updated: 11:38AM EST
Earlier today, the Dallas Fed released its monthly Texas Manufacturing Outlook Survey, which gauges the current status of the state’s factory activity. Companies are asked about changes in various indicators, such as production, employment, and prices. A score above zero signifies growth from the preceding month, whereas a number below zero indicates a decline, and an exact zero means no change.
For the month of September, the Texas Manufacturing Outlook Survey came in at -18.1, which was lower than the expected -12. In addition, this was a decrease from last month’s print of -17.2.
Last updated: 9:30AM EST
Stocks opened lower at the beginning of the last trading week of September, with the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) down by 0.46%, 0.32%, and 0.23%, respectively, at 9:30 a.m. EST, September 25.
First published: 4:20AM EST
U.S. stock futures trended higher on Monday morning, starting the last trading week of September on a good note. All three major indices are set to end the month with losses on concerns over high interest rates. Futures on the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) were up by 0.35%, 0.32%, and 0.27%, respectively, at 4:20 a.m. EST, September 25.
Investors are spooked by the thought of one more rate hike before the end of the year and an indication by the Federal Reserve that high interest rates could last longer than earlier predicted. Rising bond yields, an increase in oil prices, and the distraction related to a possible government shutdown are also weighing on investor sentiment.
Coming to this week’s key economic releases, traders will pay attention to September’s Consumer Confidence data to be released on Tuesday, Q2 GDP growth final reading scheduled for Thursday, and August’s core Personal Consumption Expenditures (PCE) report on Friday. Markets will also focus on Fed Chair Jerome Powell’s speech scheduled for Thursday. Powell would provide his perspective on the economy and monetary policy.
Some key earnings are lined up this week, namely Costco Wholesale (COST), Micron Technology (MU), and Nike (NKE),
Meanwhile, Hollywood writers and studios have reached a tentative deal to end the much-talked-about strike after almost 150 days. The news is expected to impact stocks of Disney (DIS), Netflix (NFLX), and Warner Bros. Discovery (WBD).
Elsewhere, European indices were in the red as of writing, as investors digested interest rate decisions by central banks of several countries last week. In particular, the Bank of England decided to pause its interest rate hike spree but cautioned that inflation is still not at the desired levels and it might have to keep interest rates “high enough for long enough” to reach its goal.
Asia-Pacific Markets End Mixed on Monday
Asia-Pacific indices were mixed on Monday as traders await inflation data from Singapore, Japan, and Australia.
Hong Kong’s Hang Seng index and China’s Shanghai Composite and Shenzhen Component indices declined by 1.82%, 0.54%, and 0.57%, respectively.
In contrast, Japan’s Nikkei and Topix indices closed higher by 0.85% and 0.39%, respectively.
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