A trader works on the exchange floor on the last trading day before Christmas at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., December 23, 2021.
Andrew Kelly | Reuters
US stocks were flat on Monday night after the major averages extended their decline, until the Nasdaq recovered to start a four-day losing streak.
Futures tied to the Dow Jones Industrial Average fell 17 points, or 0.05%. S&P 500 futures were down 0.01% and Nasdaq 100 futures were slightly higher.
In normal trading, the Nasdaq turned light green at the close after a consecutive day of declines from last week’s sell-off, fueled by bond yields and worries about upcoming actions by the Federal Reserve. Federal Reserve. It closed 0.05% higher and erased 2.7%. Meanwhile, the Dow lost 162 points, or 0.4%, while the S&P 500 lost 0.1%.
Stocks continue to come under pressure as bond yields continue to rise. On Monday, the yield on the 10-year US Treasury note rose to 1.8 percent, after ending 2021 at 1.5 percent.
On Monday, JPMorgan’s Marko Kolanovic issued a note that the market can tolerate higher yields, as well as omicrons, and that investors should buy into technology stocks.
“The reduction in risk assets in response to the Fed minutes is considered overdone,” he said. “Policy tightening is likely to happen slowly and at a pace that risk assets can handle and is happening in an environment of strong cyclical recovery.”
Jim Paulsen of Leuthold Group says that while the stock market is likely to experience a correction this year – and last week’s action could be the start of an event – it will be met by strong fundamentals of the company.
“Historically, the stock market has suffered some nasty ‘angsts’, and many rate hikes have ultimately led to a bearish bear market,” Paulsen said in a note Monday night. . “However, the current focus of investors may be misplaced. The stock market reaction is likely to be less related to the timing and number of rate hikes than to the ‘direction’ of the stock market. real income.”
Earnings season will be in full swing this weekend with major banks reporting starting Friday. Looking ahead, Albertson is expected to report quarterly results before the bell on Tuesday.
It’s also been an important week in terms of economic data, including key inflation data. On Tuesday, Federal Reserve Chairman Jerome Powell will hold a confirmation hearing. Kansas City Fed President Esther George is also expected to speak on economic policy, as is Fed President St. Louis James Bullard at the end of the day.
