Major market averages opened trading on Monday to the downside with investors looking ahead towards retail earnings this week for further direction.
Rates were higher early on following a bond market holiday to end last week. The 10-year Treasury yield (US10Y) was up 4 basis points to 3.86% and the 2-year yield (US2Y) was up 9 basis points to 4.42%.
Of the 11 S&P sectors 7 traded lower as the Consumer Discretionary segment suffered the worst losses. On the other hand, Health Care traded the highest.
With little on the economic calendar, attention will be on the Fed speakers.
Overnight, Fed Governor Christopher Waller told a conference in Sydney that the market got ahead of itself after the cooler CPI last week. Not exactly an “irrational exuberance” moment, but enough to give traders pause.
“Federal Reserve Vice Chair Brainard (who is an economist) is scheduled to speak,” UBS chief economist Paul Donovan said. “It could be claimed that Brainard started the discussion of slowing the pace of tightening – focusing on the need for profit margins to be squeezed, and allowing the effects of past policy tightening to be assessed.”
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