Carl Court
U.S. stocks on Monday made small moves, as traders remained cautious ahead of the FOMC meeting later this week.
The S&P 500 (SP500) and the Nasdaq Composite (COMP.IND) were largely unchanged in early trade, while the Dow (DJI) was also -0.1%.
“You’d be hard pressed to find someone who thinks (the Fed will) hike this week but our expectation is that they keep the door open for another hike later this year which the dot plot will continue to reflect,” Deutsche Bank’s Jim Reid said. “Our economists believe other parts of the SEP are likely to undergo meaningful revisions, particularly for 2023.”
“Stronger growth (2023 could double to 2%, 2024 could increase around 25bps to 1.3%) and lower unemployment should counterbalance softer inflation (2023 revised down but core forecasts for 2024 likely to be unchanged). So the meeting is likely to see a confident pause but one where further tightening is seen as the risk.”
The 10-year Treasury yield (US10Y) rose 1 basis point to 4.33% and the 2-year yield (US2Y) rose 3 basis points to 5.06%.
The economic calendar was light on Monday, with just the NAHB housing market index on the docket. The figure dipped in September and trailed consensus.
“Fed rate hikes have not impacted existing homeowners, nearly all of whom locked in mortgage rates,” UBS’ Paul Donovan said. “However, new home owners are facing higher borrowing costs, especially relative to weaker consumer spending power.”
See the stocks making the biggest morning moves.
