Michael M. Santiago
U.S. stocks on Monday were on track to extend their losses into a second straight session as sentiment weighed down by concerns that Friday’s explosive jobs report could keep the Federal Reserve on hold. currency book. tight policy.
At the last hour of trading, the tech-heavy Nasdaq Composite (COMP.IND) To be down 1.18% up 11,864.71 points. The benchmark S&P 500 (SP500) down 0.78% up 4,104.28 points, while the blue-chip Dow (DJI) down 0.28% to 33,830.45 points.
All 11 S&P sectors – with the exception of Utilities – trade in the red, led by Technology and Media Services.
Treasury yields rose. Yields on 10-year US Treasuries (US10Y) rose 10 basis points to 3.63%, while the 2-year yield (US2Y) increased by 15 basis points to 4.45%. Meanwhile, exchange-traded funds are exposed to the Treasury market fall.
All three major averages on Friday failed after the release of data showing that the US economy added 517K jobs in January, much higher than expected. Furthermore, the report showed that the unemployment rate fell to a 53-year low.
The numbers continue to point to a highly resilient labor market and likely to thwart the Fed’s plan to return to rate hikes.
“Data has become less reliable after the pandemic, but companies signal they don’t want to lose employees,” said Paul Donovan of UBS. “Labour hoarding and lower labor-market exit rates produce an increase in payrolls (although this is inconsistent with comparable household survey data). The message is a strong report. powerful, but not quite as powerful as the headlines suggest.”
Despite Friday’s pullback, the benchmark S&P 500 (SP500) achieve an overall gain for last week after markets rallied after Fed chair Jerome Powell acknowledged that the process of “de-inflation” had begun, although he warned that the central bank still had a lot of work to do and signaled new challenges. next price hike.
The economic calendar is fairly light on Monday and will stay that way for most of this week, focusing on a series Speaker Fed appointment to talk.
With the blockbuster payrolls printout, Fed Chair Powell’s speech at the Economic Club of Washington tomorrow could be the highlight,” said Jim Reid of Deutsche Bank.
“Opening the valve after a blackout will mean we also have a small range of other Fed speakers, including Vice President Oversight Barr (tomorrow), New York Fed President Williams, Fed Governor Cook, Minneapolis President Kashkari and Fed Governor Waller (both Wednesday) Their comments on the payroll report will be devoured and it will be interesting if they, and especially Powell, decide to step up a bit. tend to be more hawkish and more obvious about the final rate above 5%,” added Reid.
Among the active stocks, Catalent (CTLT) rose sharply and was the highest percentage gainer on the S&P 500 (SP500) after Jefferies estimate offering price of $93/share to the company under a potential merger agreement with Danaher (DHR).
Newmont shares (NEM) decreased after the offer to buy back Australia top gold miner Newcrest Mining.
In earnings-related news, Tyson Foods (TSN) lower than later Report disappointing results. Market participants will be waiting for results from companies like video game publisher Activision Blizzard (ATVI) and Take-Two (TTWO) after the closing bell.
