The narrative is shifting a bit in the US stock market. Lower yields are not helping today even though the 10-year yield is down -9.2 basis points.
The move lower in yields was helped by weaker data with jobless claims rising, the Philadelphia Fed index still negative, and industrial production/capacity utilization weaker. The NAHB housing market index was also lower-than-expected.
So suddenly the narrative shifts a little bit more toward fears of the recession and not a soft landing. The declines in stocks are not great but the upside seems a little bit tougher as the focus turns to the idea that earnings might suffer with a slower economy.
A snapshot of the market currently shows
Dow Industrial Average -83.62 points or -0.24% at 34907.60
S&P index -5.93 points or -0.13% at 4496.96
NASDAQ index -39.32 points or -0.28% at 14064.51
Looking at the NASDAQ index, the move higher took the price above the next target at 14149.62 yesterday, but could not sustain momentum (above the September 1 high). The price is now moving away from that target level. The high price today reached 14130.45 below that target level. There is a big gap in the NASDAQ that runs from 13802 up to 14003. Traders will watch the 14149.62 level for clues now. Move above is more bullish. Stay below is a short-term negative.
A snapshot of the debt market currently shows:
2-year yield 4.835% -8.3 basis points
5-year yield 4.431%, -9.5 basis points
10-year yield 4.443% -5.4 basis points
30-year yield 4.616% -7.6 basis points
There is a bit of the view that the Fed cutting is good for stocks. It may be over time, but there may be some ups and downs too dependent on the economy of course and what that does to earnings.