As the presser continues, the squeeze continues in bond prices and in stock prices. Chair Powell started off more hawkish but as he went along he seemed more confident that inflation and the potential to move back down. Nevertheless, he is still intent on killing inflation. He does not want to not finish the job. The markets are also just more convinced that the wheels are in motion as job growth slows and inflation pressures ease ahead and then congruent with that job situation.
On Friday, the US employment report has the opportunity to confirm a softer jobs situation.The ADP did that earlier today. The JOLTs job openings did not.
In the US debt market,yields reacted positively with prices moving higher/yields moving lower:
- two year 4.118%, -8.4 basis points
- five year 3.508% -12.7 basis points
- 10 year 3.407% -12.2 basis points
- 30 year 3.557% -10.3 basis points
Meanwhile in the stock market , the lower yields are pushing up stock prices especially in the NASDAQ index.That index is now up 233 points or 1.96%.
For the S&P index it is also higher by near 1.25% and comfortably above the 4100 level. That Looking at the daily chart of the S&P index, the next target comes in at 4155.10. That is the 50% midpoint of the move down from the January 2022 high.
