Stocks rebound after last weeks selloff as dip buyers emerge. The S&P 500 rose 0.1%. The Nasdaq 100 added 0.3%. The Dow Jones Industrial Average slid 0.4%. A Bloomberg gauge of the “Magnificent Seven” megacaps climbed 0.9%. The Russell 2000 of small firms retreated 0.4%.
Treasury 10-year yields dropped four basis points to 3.66%. That’s ahead of a a $58 billion sale of three-year notes.
“If demand for the notes is weak, it could spark hawkish money flows while an auction outcome too-strong could reignite recession worries,” said Tom Essaye at The Sevens Report. “More ‘wait-and-see trading’ is most likely for today’s session as traders await the latest inflation data — which has the potential to shift Federal Reserve policy expectations ahead of next week’s meeting.”
US equities are unlikely to slump 20% or more as the risk of a recession remains low against expected interest-rate cuts from the Fed, according to Goldman Sachs Group Inc. strategists.
The team led by Christian Mueller-Glissmann said while stocks could decline into the year end — hurt by higher valuations, a mixed growth outlook and policy uncertainty — the odds of an outright bear market are slim as the economy is also in part being supported by a “healthy private sector.”
Corporate Highlights:
- Apple Inc. lost its court fight over a €13 billion ($14.4 billion) Irish tax bill and Google lost its challenge over a €2.4 billion fine for abusing its market power, in a double boost to the European Union’s crackdown on Big Tech.
- JPMorgan Chase & Co. is leading a historic retreat from preferred shares as Wall Street lenders re-jig their balance sheets ahead of new rules that are set to be significantly watered down.
- Southwest Airlines Co. Chairman Gary Kelly is stepping down along with six directors, a dramatic move after the carrier faced calls for a strategic overhaul from activist investor Elliott Investment Management.
- BMW AG warned that a recall affecting some 1.5 million vehicles due to faults with their Continental AG braking systems will cut its profit this year, adding to the industrial crisis in Europe’s largest economy.
- Volkswagen AG is ending job protections for auto workers in Germany as part of its cost-cutting push, setting up a showdown with unions as the country’s most important industry fights for its future.
Key events this week:
- US CPI, Wednesday
- Japan PPI, Thursday
- ECB rate decision, Thursday
- US initial jobless claims, PPI, Thursday
- Eurozone industrial production, Friday
- Japan industrial production, Friday
- U. Michigan consumer sentiment, Friday
Some of the main moves in markets:
Stocks
- The S&P 500 rose 0.1% as of 11:18 a.m. New York time
- The Nasdaq 100 rose 0.3%
- The Dow Jones Industrial Average fell 0.4%
- The Stoxx Europe 600 fell 0.5%
- The MSCI World Index was little changed
- KBW Bank Index fell 2.5%
- Bloomberg Magnificent 7 Total Return Index rose 0.9%
- The Russell 2000 Index fell 0.4%
Currencies
- The Bloomberg Dollar Spot Index rose 0.1%
- The euro was little changed at $1.1025
- The British pound was little changed at $1.3062
- The Japanese yen rose 0.4% to 142.58 per dollar
Cryptocurrencies
- Bitcoin fell 0.2% to $56,928.11
- Ether was little changed at $2,340.92
Bonds
- The yield on 10-year Treasuries declined four basis points to 3.66%
- Germany’s 10-year yield declined two basis points to 2.15%
- Britain’s 10-year yield declined two basis points to 3.83%
Commodities
- West Texas Intermediate crude fell 3.7% to $66.18 a barrel
- Spot gold rose 0.2% to $2,510.88 an ounce