S&P Notches 3rd Straight Record High
US Stocks remained bid yesterday with the S&P and Nasdaq hitting record highs, the third consecutive session in a row for the S&P, as investors eye up key earnings data for major players in the next few days. The Dow bucked the trend, closing down 0.25%, but the S&P – up 0.29% – and the Nasdaq – up 0.43% – kept up the positive momentum that stocks have experienced over the last week. The dollar had another quiet day against most of the major, rising just 0.18% on the index, but had experienced a roller-coaster ride earlier against the Yen after the BOJ kept rates on hold but advised that conditions for rate hikes were developing. US treasury yields were quiet, Oil drifted lower and Gold traded within the recent range.
US Stocks Continue to Drive Higher
Equities markets have shrugged off the Federal Reserve’s warnings that interest-rate cuts are further away that it thinks. Instead, investors are now focussing on data that shows the economy’s resilience even after the most aggressive policy-tightening cycle in decades. However, with the major indices all sitting at or near record highs, there are some on Wall Street who are starting to question if this bull run will maintain its momentum as the market reins in bets of a March rate cut. The CME’s Fedwatch tool has the market at 50/50 on whether we see a 25-bps cut or not, down from 80% just over a week ago. This is a big turn around and given the big run up after the Fed’s December meeting was largely attributed to coming cuts, many would think that there could be some downside potential in the near future.
Big Market Calendar Day Ahead for Traders
It is set to be a big day ahead for traders today as they deal with a raft of inflation data across the globe and another central bank rate call. APAC traders were on their toes early in the day today as key CPI data came out in New Zealand, although the response was muted as it was largely as expected. There is little of note on the calendar for the rest of the Asian session but once Europe opens the market is flooded with a deluge of Flash Manufacturing and Service PMI data. France, Germany and the UK numbers are out in the earlier session and the US numbers come soon after New York opens. The major focus in North America, however, will be the latest rate call from the Bank of Canada – once again no change is expected but the statement and further comments should see volatility in the Loony.
