FilippoBacci
Wall Street’s major market averages have been pushed lower to start off the holiday shortened trading week while U.S. Treasury yields made a move higher.
The S&P 500 (SP500) was -0.1%, the Dow (DJI) was -0.4%, and the Nasdaq Composite (COMP:IND) was -0.1%.
From a sector vantage point, 8 of the 11 S&P segments traded in negative territory with Industrials and Communication Services leading the way lower. At the other end of the spectrum was Energy and Utilities leading all sectors higher.
Looking towards the Treasury market and yields were on the move higher with the shorter end U.S. 2 Year Treasury yield (US2Y) climbing by 4 basis points to 4.63%. At the same time the longer end U.S. 10 Year Treasury yield (US10Y) moved up by 5 basis points to 4.25%.
See how other yields trade across the entire yield curve here.
The “most exciting event of the week happens once markets are actually closed for the month and Q1 is done and dusted in performance terms,” Deutsche Bank’s Jim Reid said. The “monthly US personal income and spending report, which contains the crucial core PCE, is released on Good Friday when bond and equity markets are closed.”
Fed chief Jay Powell will also speak on Friday as it is not a federal holiday.
“In Powell’s press conference (last week), he remarked that the month-over-month print for core PCE could be ‘well below 30bps’ at the end of the month,” Reid said. “Taking him at his word does offer downside risk.”
Moreover, the first rate cut is priced in for June. According to a Reuters poll, 72 of 108 economists said the Federal Reserve will cut the first Fed Funds rate in June.
On the economic calendar, new home sales data came in weaker than expected in February. February new home sales came in at -0.3% M/M to 662K versus the 675K consensus and 664K prior (revised from 661K) levels.