Last Updated 4:05 PM EST
Stock indices finished today’s trading session in the green. The Dow Jones Industrial Average (DJIA), the S&P 500 (SPX), and the Nasdaq 100 (NDX) gained 1.11%, 1.15%, and 1.6%, respectively.
The energy sector (XLE) was the session’s laggard, as it lost 0.23%. Conversely, the technology sector (XLK) was the session’s leader, with a gain of 1.75%.
Furthermore, the U.S. 10-Year Treasury yield decreased to 3.72%. Conversely, the Two-Year Treasury yield increased, as it hovers around 4.53%. This brings the spread between them to -81 basis points.
Compared to Friday, the market is pricing in a higher chance of a higher Fed Funds rate for June 2023. In fact, the market’s expectations for a rate in the range of 5.25% to 5.5% increased to 42.1% compared to Friday’s expectations of 38.4%.
In addition, the market is now also assigning a 44.7% probability to a range of 5% to 5.25%. For reference, investors had assigned a 48.4% chance Friday.
Last Updated: 12:50PM EST
Stock indices are in the green so far in today’s trading session. As of 12:50 p.m. EST, the Dow Jones Industrial Average (DJIA), the S&P 500 (SPX), and the Nasdaq 100 (NDX) are up 1%, 1.1%, and 1.7%, respectively.
Fed Governor Michelle Bowman spoke earlier today and reiterated the central bank’s usual talking points. Similar to what New York Fed President John Williams said last week, Bowman believes interest rates need to go higher in order to bring inflation down to their 2% target. As a result, once interest rates eventually peak, she believes that they will need to remain at that level for some time in order to restore price stability.
However, Bowman also provided a slightly more positive tone by suggesting a soft landing is still possible thanks to a very strong labor market alongside easing inflation. It’s possible that this is the reason why stocks are rallying today.
Last Updated: 10:10AM EST
Stocks have found their direction with the Nasdaq 100 (NDX), S&P 500 (SPX), and Dow Jones Industrial Average (DJIA) up 0.7%, 0.5%, and 0.6%, respectively, as of 10:10 a.m. EST.
Last Updated: 9:30AM EST
After finishing last week in negative territory, the major indices opened the new week looking for direction. The Nasdaq 100 (NDX), S&P 500 (SPX), and Dow Jones Industrial Average (DJIA) are all treading water near the flatline as of 9:30 a.m. EST, Monday.
Last week, traders digested the fact that, despite the cooling inflation numbers, the Fed will continue with its hawkish stance. The preliminary results on consumer inflation expectations over the next five years, reported by the University of Michigan, came in better-than-expected at 66.4. Easing inflation numbers may have likely beefed-up consumer confidence in February.
Importantly, traders eagerly await the Consumer Price Index (CPI) reading along with the retail sales data due on Tuesday, February 14. As per the Bureau of Labor Statistics, the CPI is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. The CPI will determine if the prices of goods and services are falling or rising, and markets will react accordingly, at least for the short term.
In other news, a WSJ report stated that investors have sold a net of $13 billion worth of U.S.-based mutual funds and exchange-traded funds (ETFs) in the past six weeks. What’s worse, investors are also preferring to invest in stocks from emerging markets instead of U.S. stocks.
Major earnings this week include beverage behemoth Coca-Cola (NYSE:KO) and Deere & Co. (NYSE:DE). The earnings of both these companies may likely reflect real consumer spending behavior in an inflationary environment.
Elsewhere, all major European indices are trading in positive territory, following their U.S. counterparts.
Asia-Pacific Markets Remain Mixed
Chinese indices ended the trading session mixed today ahead of the U.S. CPI release. Hong Kong’s Hang Seng closed down 0.12%. Meanwhile, Mainland China’s Shanghai Composite and Shenzhen Component indices ended up 0.72% and 1.14%, respectively.
Japan’s Nikkei and Topix closed down 0.88% and 0.47%, respectively.
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