As the market pauses after the S&P 500 soared more than +5% over the previous two sessions, December S&P 500 futures are down by -0.85% this morning. After T-note yields increased this morning as a result of the economic news showing that August was revised higher and September ADP employment surged more than anticipated, hopes that the Fed will switch to a more dovish policy were dampened. The 10-year T-note yield is now 3.703%, up +7.0 basis points today.
Following Citigroup’s late-Tuesday message to customers, which stated that “we are still in the early stages of positioning for recession” and that there is “additional downside risk for the market and the earnings season,” stocks were also under pressure today.
Following this morning’s news that the U.S. August trade deficit narrowed more than anticipated, a positive development for GDP, stock indices rose from their lowest points.
Compared to predictions of +200,000, the U.S. Sep ADP employment change increased by +208,000. Additionally, the August ADP employment change was increased from the previously reported +132,00 to +185,000.
The U.S. trade deficit for August decreased from a revised -$70.5 billion in July to -$67.4 billion, which was less than expected at -$67.7 billion and the lowest deficit in 15 months.
The big rise of +4.26% on Tuesday has been partially offset by today’s decline of -0.89% in the Euro Stoxx 50. The total market is declining as a result of weakness in the automotive, real estate, and retail sectors. The Eurozone Sep S&P Global composite PMI was revised downward to the sharpest pace of contraction in 20 months, which further dragged on stocks in today’s economic data. The 10-year German bund yield has increased +6.0 bp to 1.931%, which is negative for stocks together with higher European government bond yields.
Original article posted on barchart.com