Quiver Quantitative - The resurgence of the bond rally faltered as traders prepared for a significant $16 billion sale of 20-year Treasuries, amid heightened attention to how government debt auctions might affect the broader markets. As U.S. Treasury yields saw a modest increase, staying under the 4.5%-mark, stock markets registered slight gains with the S&P 500 extending its positive streak and the Nasdaq 100 moving towards its highest point since early 2022. Microsoft (NASDAQ:MSFT). made headlines with its recruitment of OpenAI co-founders for its advanced AI research team, contributing to the optimistic sentiment in the tech sector.
Investors are keeping a wary eye on the Treasury supply this week, as the 20-year auction could trigger movements in yields and set the tone for market liquidity. Amidst these developments, expectations are set for robust earnings from tech giant Nvidia (NVDA) and a slew of retail companies, which could further influence market dynamics. While the Bloomberg US Aggregate index shows signs of recovery after a challenging previous year, the current market conditions suggest a cautious approach with a focus on stability as we head into 2024.
With the earnings season nearing its end, markets are now anticipating the performance of retailers and tech firms, with Nvidia's results particularly in the spotlight due to the strong demand for AI. Simultaneously, strategists observe the S&P 500's rally with skepticism, suggesting that the current levels may not be sustainable. Analysts are divided over Corporate America's earnings outlook for the next year, with differing views on whether profits will withstand a potential recession.
In the background, the U.S. Treasury Secretary Janet Yellen's remarks about making "considerable progress" in reducing inflation, despite a robust labor market, offer a glimpse of hope. At the same time, Germany's budgetary discussions and the upcoming OPEC+ meeting to address oil prices add layers of complexity to the global financial landscape. As the week unfolds, investors will closely monitor these developments alongside key economic indicators and policy decisions that could reshape market sentiment.
Stocks -(SPY (NYSE:SPY)) rose 0.3% as of 11 AM EST - (QQQ) rose 0.6% -(DIA) rose 0.3%
Currencies -The Bloomberg Dollar Spot Index fell 0.3% -The euro rose 0.2% to $1.09 -The British pound rose 0.2% to $1.24 -The Japanese yen rose 0.8% to 148.47 per $1 USD
Bonds -The yield on 10-year Treasuries advanced three basis points to 4.46% (TLT) -Germany’s 10-year yield advanced two basis points to 2.61% -Britain’s 10-year yield advanced two basis points to 4.12%
Commodities -West Texas Intermediate (USO (NYSE:USO)) crude rose 1.9% to $77.36 a barrel - Spot gold fell 0.5% to $1,970.64 an ounce
This article was originally published on Quiver Quantitative