According to the most recent Markets Live Pulse survey, this year’s US stock market rise is robust enough to survive another leg higher for bond yields.
The majority of 331 respondents anticipate that losses for the S&P 500 Index, should yields on the 10-year Treasury restart their ascent and hit 4.5%.
Will be kept to less than 10%, as the soft-landing story for the largest economy in the world gains hold. So, part of the US equity benchmark’s 18% year-to-date gains could be maintained.
Wayne Cole provides an overview of the European and international markets for the day.
With China shares leading the way, Asian stocks have extended. Their gains from the previous week amid speculation that Beijing’s myriad minor policy changes.
May eventually combine to produce substantial stimulus. The next step is anticipat to be a loosening of property buyer restrictions.
The stock market rally is set.
3.9 billion yuan ($537 million) in onshore debt payments Stock Market Rally Is Set were extend. As part of a settlement between Country Garden and its creditors.
Which brought about a lot of comfort. As a result, Chinese blue chips are up an additional 1.2% on top of their 2.2% gain from last week.
The Topix index of Japanese stocks reached a 33-year high as statistics revealed that recurring earnings at Japanese corporations reached a record in the second quarter.
Japanese stocks have also been performing nicely. More than the whole 447 trillion market capitalization of the Topix, companies are holding an astounding 555 trillion yen ($3.80 trillion) in earnings in reserve.
This is one of the reasons the Topix trades at a paltry PE ratio of just 14, as opposed to the S&P 500’s 23 and the Nasdaq’s 29.5.
The July U.S. payrolls report, which looked to Stock Market Rally Is Set have something to offer everyone. Was still being praise by the stock market.
The massive 736,000 increase in the workforce.
Which ate up an increase of 222,000 jobs and raised the unemployment rate, was the most notable aspect of the household survey.
That gave the Fed hope that an increase in the labor Stock Market Rally Is Set supply may relieve wage pressures. Even while hiring remained robust, a situation that would be just right for the Fed.
Futures currently indicate a 93% chance of no raise this month and a 63% chance that the tightening cycle has ended in addition.
The market anticipates 107 basis points of easing in 2019, up from about 90 basis points at the beginning of last week.
Nevertheless, strangely, Treasuries continued to decline on Friday, with longer-term rates shooting up as the curve’s bearishness deepened.
Although cash Treasury securities are not traded today, futures are down further 5 ticks. Suggesting that the market may be devaluing debt in anticipation of a spike in corporate issuance this week.
Stock Market Rally Is Set
The budget deficit, which is anticipat to reach $2 trillion for the year ending in September. According to the Washington Post this morning, may also cause some sticker shock.
The majority of analysts anticipate a slowdown in the economy through 2024 and an increase in unemployment, thus there must be a chance for a bigger deficit in 2023–2024.
Furthermore, the Fed is now a seller of the debt.
Rather than a buyer, so the market will have to absorb Stock Market Rally Is Set a tremendous. Amount of new paper in the upcoming months.
Things might get very unpleasant if the Japanese or Chinese central banks decide. To sell any of their Treasury securities now in order to finance dollar intervention.
Important events that could affect markets on Monday include. Remarks from board members Frank Elderson, Philip Lane, and Fabio Panetta as well as ECB President Christine Lagarde