The narrative is shifting a bit in the US stock market. Lower yields are not helping today even though the 10-year yield is down -9.2 basis points.
The move lower and yields was helped by weaker data with jobless claims rising, the Philadelphia Fed index still negative, and industrial production/capacity utilization weaker. The NAHB housing market index was also lower-than-expected.
So suddenly the narrative shifts a little bit more toward fears of the recession and not a soft landing. The declines in stocks are not great but the upside seems a little bit tougher as focus turns to the idea that earnings might suffer with a slower economy.
A snapshot of the market currently shows
- Dow Industrial Average -83.62 points or -0.24% at 34907.60
- S&P index -5.93 points or -0.13% at 4496.96
- NASDAQ index -39.32 points or -0.28% at 14064.51
a snapshot of the debt market currently shows:
- 2-year yield 4.835% -8.3 basis points
- 5-year yield 4.431%, -9.5 basis points
- 10-year yield 4.443% -5.4 basis points
- 30-year yield 4.616% -7.6 basis points
There is a bit of the view that the Fed cutting is good for stocks. It may be over time, but there may be some ups and downs too dependent on the economy of course and what that does to earnings.