The futures markets are little changed this morning following notable winning streaks in the S&P 500 and NASDAQ. These indices have recently climbed for seven and nine trading days in a row, respectively, matching the longest periods of advance since 2021. Causes included the Federal Reserve’s decision to hold interest rates steady, while the recent jobs report showed that the economy was cooling down. Later this morning, before the market opens for trading, Federal Reserve Chairman Jerome Powell is slated to give the opening remarks at the Federal Reserve Division of Research and Statistics Centennial Conference, which could provide further insight into U.S. monetary policy. The outcome of this speech may well have a significant impact on trading later today, as it could change the directionless mood of pre-market traders.
The stock markets started positively yesterday, moving upward as traders continued to react favorably to the outcome of the recent Federal Open Market Committee (FOMC) meeting. Traders believe that further interest rate hikes are now unlikely, and on the earnings front more than 80% of S&P 500 company earnings reports have beaten analysts’ expectations. The markets trended higher throughout much of the day, and ended not too far from their apexes. Overall, the S&P 500 rose 12 points (up 0.28%), the NASDAQ increased 121 points (up 0.90%), and the Dow Jones Industrial Average finished higher by 57 points (up 0.17%). Looking closer, not all was as rosy as the recent trends suggest. Market breadth was not strong, as decliners outpaced advancers by a 1.4-to-1.0 ratio. Consumer discretionary stocks were among the best performers, while energy issues finished among the weakest. Dow-30 component and tech giant Microsoft (MSFT), reached a new all-time high price.
In commodity news, energy prices fell significantly yesterday, continuing a trend lower, as fears about a global oversupply have continued to grow. Specifically, oil slid below $78 per barrel, which marks the lowest level since July. Elsewhere, U.S. Treasury bond yields were higher across the board, with short-term rates rising more than those with longer durations. The yield curve remains inverted, which usually portends a coming recession. The Chicago Board Options Exchange Volatility Index, or VIX, more commonly known as the fear index, declined slightly yesterday, following a trend of several days of lower prices.
Looking ahead, several economic reports will be released in the coming days. These include initial jobless claims on Thursday and the consumer sentiment index on Friday. Additionally, traders will be looking toward the several speeches given by leaders of the Federal Reserve, including one from Fed Chairman Jerome Powell at the International Monetary Fund. Elsewhere, several hundred earnings reports will be released in the days ahead, giving further insight into how the economy is faring. This most notably includes entertainment conglomerate and Dow-30 member, The Walt Disney Company (DIS) after the closing bell today. - John E. Seibert III
At the time of this article’s writing, the author held positions in one or more of the companies mentioned.
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