In an effort to regain some ground after the worst week of the year on Wall Street, stocks increased on Monday. Investors anticipated again another significant week for retail results.
334 points, or 1%, were added to the Dow Jones Industrial Average. The S&P 500
climbed 0.9%, while the Nasdaq Composite gained 0.8%.
The actions come following an easing of Treasury yields after the 2-year rate on Monday reached its highest level since July 2007. The last time it traded lower was at 4.791%.
Keith Lerner, chief market analyst at Truist, stated that “better economic data combined with stickier inflation tendencies have resulted in a dramatic surge in interest rates and downward pressure on market valuations.” “This confirms that a stronger economy keeps the Fed tighter for longer, which is part of the market’s conundrum,”
Union Pacific, a railroad firm, gave the S&P a boost as well, rising 10% after the announcement that CEO Lance Fritz will step down this year.
Following a larger-than-expected increase in the most recent data for personal consumption expenditures, the Federal Reserve’s favored inflation barometer, stocks fell Friday and Treasury yields rose.
The early 2023 surge appears to be losing steam as traders fear that rates may rise further. The minutes from the most recent Fed meeting revealed that members are determined to keep hiking rates until inflation decreases.
According to Chris Larkin, head of trading and investing at E-Trade, “a holiday-shortened week was more than enough time for bearish to remind everyone that January’s rise didn’t imply stock-market volatility had been permanently exiled.” Markets are preparing for rates to remain higher for longer, and Friday’s inflation numbers, which were hotter than expected, practically confirmed this.
Durable goods orders decreased in January due to consumers’ reduced spending on expensive items, according to economic data.
Just 6% of the S&P 500 will report earnings, but investors will be searching for information about the consumer from a number of large retailers, eateries, certain names in travel and entertainment, as well as food companies. Some of the well-known companies scheduled to release profits this week include Target, Costco, Lowe’s, and Macy’s.
Source (CNBC)
