Stocks didn’t do much, but they managed to squeak out a fresh all-time high. The bond markets definitely made some notable moves.
First, the scoreboard:
- Dow: 17,122.0, +15.3, (+0.0%)
- S&P 500: 2,000.1, +0.1, (+0.0%)
- Nasdaq: 4,569.6, -1.0, (-0.0%)
And now, the top stories on Monday:
1. Today was one of those not-so-exciting days. There wasn’t much volatility, and there were no major economic reports released to move markets in a major way. It’s worth noting that the S&P 500 climbed a whopping 0.10 point to close at a new all-time high.
2. Here’s NYSE Floor Governor Rich Barry with the trader chatter: “This morning, we overheard someone ask the question, “What could possibly derail the market’s rally?” Other than some really bad and unexpected geopolitical event, we could only come up with two other potential causes: 1) A rapid rise in rates (above-expectation economic numbers, a change in Fed outlook, etc.); and 2) Significant profit margin deterioration. We are at record high profit margins, but higher commodity prices or labour costs (commodities or labour) would have the impact of compressing earnings… If you can think of any other, let us know … Moving on…”
2. Interest rates around the world continued to make their way lower. According to Bloomberg, the yield on the German 10-year bund fell to a record low of 0.909%. Spain’s 10-year yield fell to 2.083%. “Rates on similar-maturity Austrian, Belgian, Dutch, Finnish, Irish and Italian debt also fell to all-time lows,” reported Bloomberg’s David Goodman and Lukanyo Mnyanda.
3. Earlier Wednesday, we learned that Germany’s Gfk consumer confidence index fell to 8.6 from 8.9 a month ago, and France’s INSEE business confidence index fell to 91 from 93. Both were worse than economists’ already pessimistic expectations. All of this follows a series of disappointing economic reports from the region, which have economists and bond traders increasingly convinced that the European Central Bank will make moves to ease monetary policy further. “We stand ready to adjust our policy stance further,” ECB President Mario Draghi said on Friday at Jackson Hole.
4. The yield on the 30-year Treasury bond fell to as low as 3.11%, the lowest level since May 2013.
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