The futures market is trading around breakeven levels this morning, following the all-time highs reached by several market indices yesterday. The stock market benefited from improving sentiment. Little economic news has been reported this morning to affect the market. Overall, we think traders are in a holding pattern, waiting for additional data that will confirm their bullish views. Later today, the anticipated new home sales report will be released after the market opens, providing crucial insights into the health of the housing sector.
The stock market, despite a negative start yesterday, quickly reversed course in the first hour of trading, demonstrating its resilience and trended higher through much of the session, with the major indices ending not too far from their apexes. Indeed, the S&P 500, NASDAQ, and Dow Jones Industrial Average reached all-time highs. All told, the S&P 500 increased 14 points (up 0.25%), the NASDAQ increased 100 points (up 0.56%), and the Dow Jones Industrial Average was higher by 84 points (up 0.20%). Market breadth was quite positive, with advancers outpacing decliners by a 1.6-to-1.0 ratio. Materials stocks were amongst the best performers on the day, while financials were amongst the weakest, hurt by a significant decline in the share price of credit card processing company Visa (V), which was impacted by the Department of Justice filing an antitrust suit in New York for “monopolization” of the debit card market.
In commodity news, oil prices fell yesterday, giving back some of the gains from Monday, which were up due to fears of Tropical Storm Helene potentially disrupting drilling operations in the Gulf of Mexico area. Elsewhere, U.S. Treasury bond yields were mixed, with short-term rates falling and those with longer durations rising. This suggests traders have been purchasing short-term bonds and selling longer-term ones following the Federal Reserve meeting last week. The Chicago Board Options Exchange Volatility Index, or VIX, commonly known as the fear index declined as traders moved away from options projection.
Several economic reports will be released in the days ahead. These include initial jobless claims, durable goods orders, and the second revision to second-quarter U.S. Gross Domestic Product (GDP). On Friday, personal consumption expenditures indices for August, personal spending, and the University of Michigan’s final consumer sentiment report for September are on the docket. Additionally, several Federal Reserve Regional Presidents will give remarks on the broader market and provide some insight into the Fed’s outlook. On the earnings front, a few companies will report quarterly results in the days ahead, though a significant increase will occur in the coming weeks. - John E. Seibert III
At the time of this article’s writing, the author held positions in none of the companies mentioned.
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