The stock market showed signs of fatigue near record highs as traders geared up for a flurry of economic data releases and speeches from Federal Reserve officials. Wall Street is bracing for insights into the trajectory of interest rates amidst heavy Treasury and corporate bond issuances this week, coupled with month-end positioning dynamics.
Treasury yields ticked higher following Monday’s auctions of two-year and five-year government notes. Meanwhile, US blue-chip companies capitalized on investor demand by issuing a record $172 billion in bonds in February, taking advantage of favorable borrowing conditions.
As attention shifts back to economic fundamentals, investors await Thursday’s release of the core personal consumption expenditures price index, expected to reveal the largest increase in a year. This pivotal data point will shed light on the Federal Reserve’s efforts to achieve its 2% inflation target amid recent price pressures.
According to Chris Larkin at E*Trade from Morgan Stanley, the upcoming PCE data will be closely scrutinized for insights into the Fed’s stance on future rate cuts, following recent hotter-than-expected readings in the consumer and producer price indexes.
Market Highlights:
- The S&P 500 dipped to around 5,070, with Alphabet Inc. facing renewed concerns over its AI ventures while Nvidia Corp. reached a new record.
- Treasury 10-year yields rose to 4.28%, while Bitcoin surged above $54,000.
- Goldman Sachs Group Inc. strategists anticipate further stock market gains if the economic outlook remains positive and investors diversify into recent underperformers.
- HSBC upgraded its view on global stocks to neutral, citing missed opportunities in AI-related stocks.
- Jamie Dimon of JPMorgan Chase & Co. downplayed concerns over commercial real estate, stating that problems in the sector will be contained as long as the US avoids a recession.
🗓️ Key Events This Week:
- BOE Governor Andrew Bailey speaks on Tuesday.
- US Conf. Board consumer confidence and durable goods data on Tuesday.
- Reserve Bank of New Zealand policy decision on Wednesday.
- G-20 finance ministers and central bank chiefs meet in Sao Paulo on Wednesday through Thursday.
- China official PMI and Eurozone S&P Global Manufacturing PMI on Friday.
