A trader works on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., October 27, 2023. Portal/Brendan McDermid/File Photo Acquire License Rights
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Nov 6 (Portal) – U.S. stocks closed slightly higher on Monday as investors awaited guidance later in the week from a number of Federal Reserve policymakers on the central bank’s monetary policy stance, with a large supply of bonds also on the way market should come.
Stocks posted their biggest weekly percentage gain in about a year last week as a weaker-than-expected U.S. jobs report on Friday sent U.S. Treasury yields lower on expectations the Fed is done raising interest rates next year could begin to decrease.
Market expectations that the Fed will keep interest rates steady at its December meeting are at 90.4%, down from 95.2% on Friday but up from 74.4% a week ago. Expectations for a rate cut of at least 25 basis points at the May 2024 meeting have risen to over 50%, according to CME’s FedWatch tool.
Markets will expect more clarity on the Fed’s intentions from officials speaking later in the week, including Chairman Jerome Powell and voting members such as New York Fed Chief John Williams and Dallas Fed President Lorie Logan .
“Unless something in the economic data triggers it, they’re not going to change their tone,” said Stephen Massocca, senior vice president at Wedbush Securities in San Francisco.
Expectations that the Fed is likely to be done with rate hikes sent the S&P 500 up 5.85% and the Nasdaq up 6.61% last week, their biggest weekly jumps since November 2022.
“Whatever that buying power was that took over on Friday is no longer there today, and so a lot of these names are trending lower again and the yields are a little higher,” Massocca said.
Meanwhile, the yield on the 10-year Treasury note, which fell to a five-week low on Friday, reversed and hit a high of 4.668% on Monday, ahead of this week’s Treasury auction worth about $112 billion in three-year and three-year bonds, 10-year bonds and 30-year bonds.
The Dow Jones Industrial Average (.DJI) rose 34.54 points, or 0.10%, to 34,095.86; the S&P 500 (.SPX) gained 7.64 points, or 0.18%, to 4,365.98; and the Nasdaq Composite (.IXIC) gained 40.50 points, or 0.30%, to 13,518.78.
The session marked the sixth straight rise for the Dow and S&P 500 and the seventh straight rise for the Nasdaq. The streak is the longest for the S&P 500 since early June, since July for the Dow and since January for the Nasdaq.
The economic data calendar for this week is sparse. Weekly jobless claims numbers are due on Thursday and the University of Michigan consumer sentiment report is due on Friday.
Walt Disney (DIS.N), Instacart (CART.O) and Biogen (BIIB.O) are among the major companies reporting earnings this week.
A total of 403 companies in the S&P 500 reported earnings through Friday’s third quarter, with 81.6% beating analyst estimates, according to LSEG data.
Dish Network (DISH.O) fell 37.4% to close at $3.44, having hit a 25-year low of $3.41 following news that Pay TV provider missed its third-quarter revenue estimates and CEO Erik Carlson would step down.
Bumble (BMBL.O) fell 4.4% as the dating app operator announced that founder Whitney Wolfe Herd will step down as chief executive.
On the NYSE, declining issues outnumbered advancers by a ratio of 2.3 to 1, while on the Nasdaq, declining issues outnumbered advancers by a ratio of 1.8 to 1.
The NYSE recorded 64 new highs and 43 new lows. The S&P 500 posted nine new 52-week highs and no new lows, while the Nasdaq recorded 46 new highs and 113 new lows.
Reporting by Chuck Mikolajczak; Edited by Richard Chang
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