Carl Court
The major market averages opened lower on Monday morning as investors get set to kick off the holiday-shortened week.
Early on and the S&P 500 (SP500) was -0.2%, the Dow (DJI) was -0.1%, and the Nasdaq Composite (COMP:IND) was -0.5%.
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.”
Raters were higher. The 10-year Treasury yields (US10Y) rose 3 basis points to 4.23%. The 2-year yield (US2Y) rose 2 basis points to 4.61%.
Shortly, February new home sales are due. The consensus is for a rise to an annual rate to 675K.
“The sales are expected to be more or less where they were in 2018 and 2019,” UBS’ Paul Donovan said. “This hints at a decline in interest rate sensitivity in the US economy. Housing is traditionally an interest rate sensitive area, and yet sales are the same as in a period with far lower real and nominal rates.”
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