Friends
Stocks didn’t like the action in the 10-year Treasury Note as the market averages moved lower while the longer-term yields moved higher. Again, market participants are expecting a Fed Funds rate cut by the Fed on Wednesday, but as we have pointed out for a couple of years now, the longer end of the yield curve has not cooperated with the Fed’s desire to move the interest rate complex lower. When the Fed began cutting rates back in September of 2024 the 30-year Treasury Bond was yielding less than 4%. That’s when the Fed Funds rate was just beginning to be lowered from the 5.25% -5.50% level. Here we are under 4% Fed Funds, and the 30-year is yielding 4.81%. You get my point, the long end has risen in yield while the short end has fallen.
As for stocks, by the close the Dow Jones Industrial Average was down 215 points to finish the day at 47,739. The S&P 500 was down 23 points to close at 6,846. The Nasdaq Composite Index was down 32 points to close at 23,545. Gold was down $21 to trade at $4,221 per ounce, while oil was down $1.29 to trade at $58.79 per barrel WTI.
All eyes will be on the Fed this week, but we get some interesting earnings releases from chip maker Broadcom and behemoth retailer Costco. Buckle up, it is likely to be a wild ride ahead.
Have a nice evening everyone.
