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Major market averages opened trading higher on Monday following the bullish charge in last week’s data-packed action.
Early on and the Nasdaq Composite (COMP.IND) was +0.3%, the S&P 500 (SP500) was +0.2%, and the Dow (DJI) was +0.2%.
The S&P 500 (SP500) saw its biggest weekly gain since June last week, rising nearly 5.9%.
“After a deluge of softer than expected US economic data last week we have a lull, with trade, jobless claims and inflation expectations about the sum of it, though there’s the small matter of USD 112bn in 3, 10 and 30-year debt to digest,” SocGen’s Kit Juckes said.
Yields picked themselves off the mat. The 10-year Treasury yield (US10Y) rose 5 basis points to 4.62% and the 2-year yield (US2Y) rose 6 basis points to 4.90%.
Deutsche Bank’s Jim Reid noted that last week’s rally in Treasury prices was spurred first by the quarterly refunding announcement “then the weak ISM, then the dovish Fed (all on the same day), and then finally a weak payrolls report on Friday.”
“Market reactions last week highlight the dangers of central banks bleating about data dependency without explaining their medium-term framework or how they expect policy to transmit to the real economy,” UBS’ Paul Donovan said. “It leaves investors tending to react very strongly to individual data items, even when (as with the US employment data) the figures are not precise and will likely be revised significantly.”