Spencer Pratt/Getty Images News
US major market averages fell on Monday while yields rose. Investors turned their attention to his data on corporate earnings and inflation, due out later this week, as clues to the Federal Reserve’s May policy decisions.
From early on, the Nasdaq Composite (COMP.IND) fell 1.1%the S&P 500 (SP500) fell 0.6%and Dow (DJI) trades almost flat.
Yields on 10-year Treasury bonds (US10Y) increased 5 basis points to 3.43%, while yields on 2-year bonds (US2Y) increased 3 basis points to 4.00%.
The stock market closed on Good Friday when nonfarm payrolls data was also released. The data shows that the labor market remains tight and supports expectations of a 25 basis point rate hike by the Fed. Nonfarm payrolls increased by 236,000 in March, just below the expected 240,000, and employment growth was well below the average monthly increase of 344,000 over the past six months. .
Viraj Patel, a strategist at Banda Research, tweeted: “Employment is picking up in line with expectations. Wage growth was not surprising (year-on-year decline due to base effect).” “I don’t know if anyone is smart about this. CPI is more important for the Fed to step into May.”
Fed Fund Futures Now Priced at ~67% chance There is a 33% chance of a 25 basis point rate hike in May and no rate hike at all.
Fear & Greed Trader, leader of ‘The Savvy Investor’ investment group, believes this week’s corporate earnings will help set the direction of the stock market in the coming quarters. “The Fed will only cut rates this year if the economy falls off a cliff,” they warned.
The market received wholesale stock numbers for February even though the economic calendar was fairly bright for the day. This was less than expected at 0.1% M/M compared to the consensus figure of 0.2%.
Next, read SA contributor Eric Parnell’s predictions for the stock market in the second quarter.
The S&P 500 (SP500) posted a three-week winning streak in this holiday-shortened week.
