There was a nice bid in the stock market on Friday following Amazon.com’s (AMZN) earnings report and the July employment report, and then that bid fell by the wayside in afternoon action, having been supplanted by a sell program that threw the broader market for a loop and solidified a losing week for the major indices.
Today, a rebound effort is afoot, yet the stock market isn’t necessarily putting its best foot forward as buyers are moving with some reserve still.
Currently, the S&P 500 futures are up 13 points and are trading 0.3% above fair value, the Nasdaq 100 futures are up 70 points and are trading 0.4% above fair value, and the Dow Jones Industrial Average futures are up 72 points and are trading 0.2% above fair value.
There is a little reflexive, buy-the-dip action in play, although an air of interest rate angst is also hanging over the stock market to keep things in check.
The 2-yr note yield is up four basis points to 4.82% and the 10-yr note yield is up two basis points to 4.08%.
Fed Governor Bowman (FOMC voter) has stirred up some of the angst, saying in a speech that she thinks additional rate hikes are likely to be needed to get inflation to the Fed’s goal. New York Fed President Williams (FOMC voter), meanwhile, said he thinks the Fed is close to its peak rate, but that there is some uncertainty as to how long the Fed will need to stay at a restrictive level.
It should probably come as little surprise at this juncture to hear some competing views out of the Fed; nonetheless, the market is anxious to hear the Fed publicly coalesce around the idea that it is done, and that has yet to happen.
The July Consumer Price Index, which will be released before Thursday’s open, will factor into the Fed’s decision-making process. If nothing else, it will provide a talking point throughout this week along with the last rush of earnings reporting for the June quarter.
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Originally Posted August 7, 2023 – Market working to find its footing
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