Stocks ended higher on Monday even as markets decided to settle down in the quieter week of earnings and economic data. This comes after previous week’s Fed rate decision, employment data and several earnings releases. NASDAQ performance saw an increase of ~0.3% and it experienced its longest winning streak since January as the index has gained for 7 consecutive sessions. S&P 500 jumped ~0.2% and Dow Jones Industrial Average ended the session by rising ~0.1%. Treasury yields saw some rebound from the lows which were touched on Friday after employment data exhibited that hiring pace slowed in October. This indication was welcomed by the US Fed and equity markets.
With traders eyeing the performance of NASDAQ, they are still concerned about the earnings and the outlook provided by such companies. Therefore, global investors and traders continue to closely watch market technicals and they are eyeing for the next round of growth opportunities.
Performance of NASDAQ has always been tracked by the long-term investors, but this time they will look out for the hints as to what US Fed’s Chair Powell will say about the monetary policy prospects this week.
Talking about the economic data points, exports from China saw a significant drop of ~6.4% year-over-year to $274.83 billion in October, faster than ~6.2% decline in the prior month and worse than market consensus estimates of ~3.3% fall. Some investors have turned optimistic and they expect interest rate cuts. This was seen in the sharp decline in bond yields.
Rally of the previous week was quite impressive and it came as there was some relief regarding the macro concerns, which includes high yields, growth concerns and tensions in the Middle East. Performance of NASDAQ has left some investors wondering whether equity markets will be able to sustain this rally and will it be able to climb wall of worry.
It will be fair to assume that stocks saw a significant decline before this rally. Therefore, this rally was long-due post the deep sell-off anyway. Some experts believe that equity market might struggle to extend these gains from here. This is because the macro concerns which held back the markets in previous few months are still looming. Therefore, equity markets might turn volatile again.
Apart from this, even though the oil prices have fallen back after the surge, the dangers are still there of the wider conflict in the Middle East region.