Nasdaq and S&P Push to Record Highs
It was a relatively quiet trading day to kick off the week yesterday, although with little new updates for the market, tech stocks managed to push higher again to drag the S&P and Nasdaq to new record highs. The Dow closed slightly lower on the day, losing 0.08%, with the S&P finishing up 0.10% and the Nasdaq again leading the way, up 0.28%. US Treasury yields closed close to flat ahead of the Fed Chairmans testimony to the Senate later today, the 2-year gaining 1.9 basis points to 4.618% and the 10-year losing 0.9 basis points to 4.269%. Oil prices extended recent pull backs as ceasefire hopes in Gaza increased, Brent off 0.9% to $85.75 and WTI down 1.0% to $82.33 a barrel and Gold dropped back into the range, losing 1.4% on the day to close around the $2,358 an ounce level.
Powell in Focus but CPI Should Trump All
Markets opened the week in a fairly tame fashion yesterday and traders will be hoping for more volatility in the sessions ahead, however the macroeconomic calendar isn’t really playing ball on that front. The main highlights of the week are set to come out of the US with Jerome Powell due to testify about the semi-annual Monetary Policy Report in front of both the Senate Banking Committee and the House Financial Services Committe. However, the key CPI data release on Thursday could have significantly more market impact especially if the Fed Chair sticks to familiar territory in his delivery to the government. Markets are now pricing in a 73% chance of a rate cut at the Fed’s September meeting and if the CPI numbers confirm that inflation is coming down in line with other recent data points then expect those odds to increase.
Rangebound Conditions to Persist Today
Traders are expecting to see more of the same today after most products traded in familiar ranges yesterday. There is little on the event calendar to move the dial for investors over the first two trading sessions of the day, however we could see some moves once New York opens with both the Fed Chair Jerome Powell and Treasury Secretary Janet Yellen due to testify in front of government. Jerome Powell’s comments are likely to be more influential than the Treasury Secretary’s with investors hoping that recent cooling data will lead to him indicating that the US will see its first rate cut in September and that there could be at least one more coming before the end of the year.
