The financial community observed mixed moves in Wall Street’s major market averages on Monday ahead of the Federal Reserve’s latest policy decision and inflation data, which are both scheduled to arrive later in the week.
The blue-chip Dow (DJI) fell 0.1%, the benchmark S&P 500 (SP500) was +0.1%, and the tech focused Nasdaq Composite (COMP:IND) moved up 0.3%.
From a sector vantage point, six of the 11 S&P segments are higher, with Energy at the top of the list. On the other end, Financials have suffered the most.
Treasury yields are mixed after Friday’s spike. The shorter end U.S. 2 Year Treasury yield (US2Y) slid 1 basis point to 4.87%. At the same time, the longer end U.S. 10 Year Treasury yield (US10Y) climbed up 2 basis points to 4.46%. Furthermore, Société Générale spotlighted some key technical levels for both the US2Y and US10Y.
See how other yields trade across the entire yield curve here.
Regarding stocks that are o the move, shares of Southwest Airlines (LUV) jumped 8% following a report that activist investor Elliott Investment Management has accumulated an almost $2B stake in the airline, making it one of the largest shareholders.
On the other end, Perion Network (PERI) plunged 27% after the company updated Q2 and FY 2024 financial guidance considerably below estimates.
Nvidia (NVDA) officially split its stock and Barclays upped its estimates, citing a potential $25B opportunity from sovereign nations building up their artificial intelligence capabilities.
Monday’s economic calendar is light as investors turn their attention to two mega events that are scheduled to take place on Wednesday: the Fed’s interest rate decision and May’s consumer price index data.
“Powell’s press conference will no doubt offer nuances around any changes, and will have the ability to put a dovish or hawkish spin on them. At this stage optionality will likely be preferred with little specific guidance,” Deutsche Bank’s Jim Reid said.
“Our forecast that the Fed will ease by a total of 125bp this year, starting in September, is predicated on the idea that the labor market is slowing sharply,” Pantheon Macroeconomics stated.
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