Wall St flat after rally as Fed speakers, Treasury auctions eyed

NEW YORK - US stocks were little changed on Monday as investors awaited guidance from a host of Federal Reserve policymakers later in the week on the central bank’s policy path, with a large amount of bond supply also due to hit the market.

Equities last week posted their biggest weekly percentage gain in about a year, as a weaker-than-expected US payrolls report on Friday sent Treasury yields lower on the view the Fed was done hiking interest rates and could start cutting them next year.

Market expectations that the Fed will hold interest rates steady at its December meeting stand at 90.4 per cent, down from 95.2 on Friday but above the 74.4 per cent a week ago. Expectations for a rate cut of at least 25 basis points have grown to more than 50 per cent at the May 2024 meeting, according to CME’s FedWatch Tool.

Markets will look for more clarity on the Fed’s intentions from officials speaking later in the week, including Chair Jerome Powell, and voting members such as New York Fed chief John Williams and Dallas Fed President Lorie Logan.

“Unless something in the economic data prompts it, you won’t see them change their tone,” said Stephen Massocca, senior vice president at Wedbush Securities in San Francisco.

Expectations the Fed was likely done with rate hikes sent the S&P 500 up 5.85 per cent last week and the Nasdaq up 6.61 per cent, their biggest weekly jumps since November 2022.

“Whatever that buying force was that sort of went rampant on Friday is not around today and so a lot of these names are drifting back down, and yields are a little higher,” said Massocca.

Meanwhile, the yield on the benchmark ten-year Treasury note , which slid to five-week lows on Friday, reversed course to reach a high of 4.662 per cent on Monday, ahead of this week’s Treasury auction of about US$112 billion (S$151.36 billion) in three- and 10-year notes and 30-year bonds.

The economic-data calendar for this week is light, with weekly jobless claims numbers due on Thursday and University of Michigan’s consumer sentiment report on Friday.

Walt Disney, Instacart and Biogen are among major companies reporting earnings this week.

A total of 403 companies in the S&P 500 have reported profits through Friday the third quarter, with 81.6 per cent surpassing analyst estimates, per LSEG data.

At 02:47 p.m. the Dow Jones Industrial Average rose 5.68 points, or 0.02 per cent, to 34,068.72, the S&P 500 gained 1.05 points, or 0.02 per cent, at 4,359.39 and the Nasdaq Composite gained 10.91 points, or 0.09 per cent, at 13,489.87.

Dish Network plummeted 34.1 per cent after touching a 25-year low of US$3.59 on news that the pay-TV provider missed third-quarter revenue estimates and CEO Erik Carlson would step down from the role.

Bumble fell 4.9 per cent as the dating app operator said founder Whitney Wolfe Herd will step down as chief executive.

Declining issues outnumbered advancers by a 2.4-to-1 ratio on the NYSE while declining issues outnumbered advancers by a 1.7-to-1 ratio on the Nasdaq.

The S&P 500 posted nine new 52-week highs and no new lows while the Nasdaq recorded 43 new highs and 99 new lows. REUTERS