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S&P, Nasdaq, Dow edge lower as Fed enters quiet period

by Atlanta Business Journal

Spencer Platt/Getty Images News

Major market averages opened trading to the downside on Monday in what is expected to be a relatively quiet week for stocks ahead of next week’s Fed meeting.

Early on and the Nasdaq Composite (COMP.IND) slid 1%, the benchmark S&P 500 (SP500) declined by 0.9%, and the Dow (DJI) came down by 0.8%.

Oil (CL1:COM) was higher. OPEC+ kept its output unchanged at the latest meeting, but Russia said it won’t accept a G7 oil price cap.

The 10-year Treasury yield (US10Y) was up 8 basis point to 3.58%. The 2-year yield (US2Y) rose 6 basis points to 4.33%.

It’s “fascinating that at the moment the market is focusing squarely on the very strong likelihood that we’ll ratchet down to ‘only’ a 50bps hike next week and extrapolating that level of dovishness rather than focus on any risks that the terminal rate could end up being nearer say 6% than 5%,” Deutsche Bank’s Jim Reid said. “Indeed Larry Summers was doing the rounds over the weekend suggesting that markets were likely under-pricing terminal and seemingly being more comfortable suggesting a peak nearer 6 than 5%, even if he wasn’t specific over a particular number.”

On the economic calendar the November ISM services index turned higher in November at 56.5 compared to the forecasted 53.3 figure.

At the same time October factory orders climbed to +1%, a rise from the anticipated + 0.7% consensus.

Among active stocks, Wynn Resorts rose as Chinese cities eased some COVID restrictions.

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