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Major market averages were mostly unchanged on Tuesday, while Treasury yields remained near even.
Early on and the S&P 500 (SP500) was -0.1%, the Nasdaq Composite (COMP.IND) was -0.1%, and the Dow (DJI) was flat.
The 10-year Treasury yield (US10Y) rose 1 basis point to 4.40% and the 2-year yield (US2Y) fell 2 basis point to 4.86%.
“We have the 7yr auction in the day ahead too to help take the market pulse,” ING said. “So far though, the break below 4.5% has been pivotal. It still feels like we don’t have enough to gap lower just yet. But far less reason to gap back higher given what we know.”
“Directionally it’s tough to argue against falling yields for now,” they added. “The data is lining up in support of it, or at least swaying in that direction. It does seem that inflation worries have been downsized, with lower delivered inflation helping.”
“Expectations have eased off too. US consumer confidence is just about hanging in, but is now teetering on the verge of a break below 100 (key breakeven reference). That will be a key reading ahead.”
The S&P CoreLogic Case-Shiller Home Price Index indicated that home prices continued their upward trend in September. September Case Shiller house price index advanced 0.7%.
Additionally, the Conference Board released its November measure of consumer confidence which came in at 102 versus the forecasted 101 level.
There’s been discussion about the usefulness of sentiment surveys given the increasing split in views based on political affiliation.
“For all these distortions to the consumer surveys, though, the expectations components are still a decent guide to growth in real consumption spending,” Pantheon Macro’s Ian Shepherdson said. “The relationship between the expectations index and real consumption spending broke down during the Trump administration from 2016-to-20 … but the pre-2016 relationship has reasserted itself over the past couple years.”
