The relentless rally in stocks took a breather on Monday, with traders awaiting this week’s batch of jobs data and remarks from Federal Reserve officials for clues on the interest-rate outlook.
Equities edged lower after the S&P 500 saw its 15th record this year. While the market has defied concerns about a peak, warnings about a consolidation or a pullback have surfaced. Treasuries fell, with syndicate desks calling for around $30 billion of new high-grade bond sales this week.
Fed Chair Jerome Powell is expected to double down on his message that there’s no rush to cut rates, especially after fresh inflation data showed price pressures persist. Meantime, jobs figures are forecast to show labor-market cooling, which would reinforce bets that the central bank will be able to ease policy as soon as June.
“If the S&P 500 is going to make this the eighth-straight week it hits an all-time high, it will likely need to hear encouraging words from Fed Chair Jerome Powell about rate cuts in his two days of congressional testimony, and avoid any major surprises from this week’s jobs data,” said Chris Larkin at E*Trade from Morgan Stanley.
The S&P 500 hovered near 5,130. Tesla Inc. dropped 4%. Nvidia Corp. overtook Saudi Aramco in market value, making the chipmaker the world’s third-most valuable public company after Apple Inc. and Microsoft Corp. Treasury 10-year yields rose four basis points to 4.22%. Bitcoin topped $66,000.
Corporate Highlights:
- Apple Inc. was hit Monday with a €1.8 billion ($2 billion) penalty from the European Union over an investigation into allegations it shut out music-streaming rivals, including Spotify Technology SA, on its platforms.
- JetBlue Airways Corp., facing pressure from activist investor Carl Icahn to return to sustainable growth, formally abandoned its pursuit of Spirit Airlines Inc. more than a month after a federal judge blocked the $3.8 billion acquisition on antitrust grounds.
- Arkhouse Management Co. and Brigade Capital Management boosted their offer for Macy’s Inc. by 14% after the retailer rebuffed a previous proposal.
- Activist investor Sachem Head Capital Management disclosed a 5.2% stake in Deliveroo Plc ahead of a governance change set to weaken the founder’s control over the UK delivery platform.
- Vista Outdoor Inc. rejected a $2 billion takeover offer from MNC Capital, saying that a separate offer from Czechoslovak Group to buy its ammunition products business is more favorable to shareholders.
- Super Micro Computer Inc. and Deckers Outdoor Corp. have been added to the S&P 500 index in the latest quarterly weighting change. The two firms will replace Whirlpool Corp. and Zions Bancorp NA prior to the start of trading on March 18.
Key Events This Week:
- Bank of Japan Governor Kazuo Ueda speaks, Tuesday
- China Caixin services PMI, Tuesday
- China kicks off its 14th National People’s Congress, Tuesday
- Eurozone S&P Global Services PMI, PPI, Tuesday
- US factory orders, ISM services, S&P Global Services PMI, Tuesday
- Super Tuesday in the US, with North Carolina, California, Texas and Oklahoma among more than a dozen states holding Republican and Democratic primaries
- Canada rate decision, Wednesday
- Eurozone retail sales, Wednesday
- US ADP employment, wholesale inventories, Wednesday
- Fed Chair Jerome Powell testifies before the House Financial Services Committee, Wednesday
- Fed issues Beige Book, Wednesday
- Fed’s Neel Kashkari (Minneapolis) and Mary Daly (San Francisco) speak, Wednesday
- China trade, forex reserves, Thursday
- European Central Bank’s rate decision, Thursday
- US initial jobless claims, trade, Thursday
- President Joe Biden delivers the State of the Union address, Thursday
- Fed Chair Jerome Powell testifies before the Senate Banking Committee, Thursday
- Cleveland Fed President Loretta Mester speaks, Thursday
- Eurozone GDP, Friday
- US nonfarm payrolls, unemployment, Friday
- New York Fed President John Williams speaks, Friday
- ECB Governing Council member Robert Holzmann speaks, Friday
Some of the main moves in markets:
Stocks
- The S&P 500 was little changed as of 9:54 a.m. New York time
- The Nasdaq 100 fell 0.2%
- The Dow Jones Industrial Average fell 0.1%
- The Stoxx Europe 600 fell 0.2%
- The MSCI World index was little changed
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro rose 0.2% to $1.0861
- The British pound rose 0.3% to $1.2690
- The Japanese yen fell 0.2% to 150.42 per dollar
Cryptocurrencies
- Bitcoin rose 5.2% to $66,145.01
- Ether rose 1.5% to $3,532.65
Bonds
- The yield on 10-year Treasuries advanced four basis points to 4.22%
- Germany’s 10-year yield was little changed at 2.41%
- Britain’s 10-year yield advanced two basis points to 4.13%
Commodities
- West Texas Intermediate crude was little changed
- Spot gold rose 0.8% to $2,100.08 an ounce
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