The S&P 500 Index ($SPX) (SPY) is down -0.24%, the Dow Jones Industrials Index ($DOWI) (DIA) is down -0.23%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.34%.
Stocks are trading lower this morning on caution ahead of Tuesday’s CPI report. A stronger-than-expected CPI report would further dampen hopes of a rate cut by the Fed over the near term. The consensus is for tomorrow’s Feb U.S. CPI to be unchanged from Jan at +3.1% y/y, which would be 0.1 point above the 2-3/4 year low of +3.0% posted in June 2023. The Feb core CPI is expected to ease to a new 2-3/4 year low of +3.7% y/y from Jan’s current 2-3/4 year low of +3.9% y/y.
Stocks are also seeing weakness on some long liquidation pressure after the S&P 500 and Nasdaq 100 last Friday posted new record highs on the net-dovish Feb U.S. unemployment report. U.S. Feb nonfarm payrolls rose +275,000, stronger than expectations of +200,000. However, Jan payrolls were revised downward to +229,000 from the previously reported +353,000. The Feb unemployment rate rose +0.2 to a 2-year high of 3.9%, showing a weaker labor market than expectations of no change at 3.7%. U.S. Feb average hourly earnings eased to +4.3% y/y from +4.4% y/y in Jan.
Stocks also saw support last week after Fed Chair Powell said in Senate testimony that the Fed is “not far” from being confident enough to start cutting interest rates. The markets were also encouraged after ECB President Lagarde last week said that the ECB could start cutting rates as soon as June.
The markets are discounting the chances for a -25 bp rate cut at 2% for the March 19-20 FOMC meeting, 25% for the following meeting on April 30-May 1, and 89% for the meeting after that on June 11-12.
Overseas stock markets today are mixed. The Euro Stoxx 50 is down -0.55%, adding to last Friday’s mild loss of -0.26%. China’s Shanghai Composite today closed up +0.74%. Japan’s Nikkei Stock Index closed down -2.19%.
Interest Rates
June 10-year T-notes (ZNM24) today are unchanged. The 10-year T-note yield is up +0.4 bp at 4.079%, just mildly above last Friday’s 5-week ow of 4.034%. T-note prices last Friday saw support from the net dovish U.S. unemployment report, but are seeing some downward pressure today on supply pressures. The Treasury will sell $54 billion of 3-year T-notes later today, $42 billion of 10-year T-notes on Tuesday, and $25 billion of 30-year T-bonds on Wednesday.
European government bond yields are mixed. The 10-year German bund yield today is up +0.7 bp at 2.274%, mildly above last Friday’s 5-week low of 2.234%. The 10-year UK gilt yield today is down -2.7 bp at 3.948%, mildly above last Friday’s 5-week low of 3.934%.
U.S. Stock Movers
Nvidia (NVDA) is down about -1% this morning, adding to last Friday’s sell-off of -5.47%. Nvidia last Friday was hit by profit taking after it initially posted a record high and surged by more than +17% over the previous six sessions.
Other chip stocks are trading lower today with losses of more than -2% in Marvell Technology (MRVL), Advanced Micro Devices (AMD), Lam Research (LRCX), Applied Materials (AMAT), and Micron Technology (MU).
Bitcoin (^BTCUSD) is up more than +3% today at a new record high, adding to last week’s rally of +9.3%. Cryptocurrencies continue to rally on the SEC’s recent move to allow spot bitcoin ETFs. Coinbase (COIN) is up more than +6% today, Marathon Digital (MARA) is up more than +5%, and Riot Platforms (RIOT) and Bit Digital (BTBT) are both up by more than +4%.
Moderna (MRNA) is the best-performing Nasadaq 100 stock today, with a gain of more than +7%.
Tesla (TSLA) is up more than +3% on a mild rebound after recent losses.
Meta Platforms (META) is the largest loser in the Nasdaq 100 this morning, with a loss of more than -4%.
Earnings Reports (3/11/2024)
Casey's General Stores Inc (CASY), Fortrea Holdings Inc (FTRE), Liberty Media Corp-Liberty Live (LLYVA), Oracle Corp (ORCL), Vail Resorts Inc (MTN).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
