![]() "Historically, the bond market does not anticipate a Fed pivot," LaVorgna said in a client note. Looking at the past three tightening cycles - 1999-2000, 2004-18 - investors expected the Fed to hold rates higher for longer, only to miss the mark when the central bank was forced into cutting much sooner than expected. The bond market has been a poor predictor in the past of when the Federal Reserve is ready to start cutting interest rates, according to research from Joseph LaVorgna, chief economist at SMBC Nikko Securities. Scott Schnipper, with reporting by CNBC's Michael Bloom and Canadian wind farms to InfraRed Capital Partners.įinally, Credit Suisse began research coverage on five utilities Monday: Dominion Energy, Exelon and Constellation Energy were rated outperform while Alliant Energy and Edison International were rated neutral.Ĭon Ed is ahead 3.5%, Algonquin is rising almost 5%, Dominion is higher by 3.1% Exelon by 2.8% and Constellation by 3.8%. Utility investors also saw Monday deal flow: Con Ed agreed to sell its Con Edison Clean Energy Businesses to Germany's RWE for an enterprise value of $6.8 billion, while Algonquin Power will sell stakes in U.S. Meanwhile, near month Henry Hub natural gas futures are falling 4% - the only contract in the energy complex that's weaker. The 10-year Treasury yield got as low as 3.58% Monday, down from 3.83% Friday. Utilities' above-average dividend yields also face less competition when Treasury yields weaken. Utilities carry so much debt and have such demanding refinancing needs that they often get a lift from falling bond yields. added as much as 3.4%, and Duke Energy climbed 3.2%. NextEra - accounting for one sixth of the ETF - gained 3.7%, while Southern Co. The Utilities Select Sector SPDR Fund rose as much as 3.5%. Utility stocks are helping to lead the broader market higher, alongside energy and materials shares Monday. Lea la cobertura del mercado de hoy en español aquí. We could be surprised with at least a near-term upward movement." "The best one is the next one, meaning the first quarter of the third year. "We could see a rally because these fourth-quarter midterm election years are the second-best average quarter and also have the second-highest frequency of advance," he said. Investors were just starting to lose hope for a fourth-quarter comeback, but Stovall said the market could still get one, noting that year-end rallies are historically stronger in midterm election years. Nine of the S&P's 11 sectors finished the previous quarter in negative territory. ![]() Those factors are contributing to the move we're seeing today." "As a result, we're seeing yields come down, we're seeing the dollar weaken. because the ISM was weaker than expected – ditto for construction spending – people are now surmising, 'Hey, maybe the Fed won't be as aggressive,'" he told CNBC. "Because the S&P was down more than 9% in September. The rally Monday is unsurprising considering how oversold markets have been, according to Sam Stovall, CFRA chief investment strategist. Both the S&P and Nasdaq Composite fell 5.28% and 4.11%, respectively, to finish their third consecutive negative quarter for the first time since 2009. The Dow shed 8.8% in September, while the S&P 500 and Nasdaq Composite lost 9.3% and 10.5%, respectively.įor the quarter, the Dow fell 6.66% to notch a three-quarter losing streak for the first time since the third quarter of 2015. The Dow on Friday also closed below 29,000 for the first time since November 2020. Wall Street is coming off a tough month, with the Dow and S&P 500 notching their biggest monthly losses since March 2020. "It's pretty simple at this point, 10-year Treasury yield goes up, and equities likely remain under pressure," Raymond James' Tavis McCourt said. Treasury note rolled over to trade at around 3.65%, after topping 4% at one point last week. Those moves came as the yield on the 10-year U.S. It was the best day since June 24 for the Dow, and the S&P 500's the best day since July 27. The Nasdaq Composite advanced nearly 2.3% to end at 10,815.43. The S&P 500 rose about 2.6% to 3,678.43, after falling Friday to its lowest level since November 2020. The Dow Jones Industrial Average ended the day 765.38 points, or nearly 2.7%, higher at 29,490.89. Stocks rallied Monday to start the new month and quarter, as Treasury yields eased from levels not seen in roughly a decade.
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