Originally published by Rivkin Securities
It was an interesting session overnight for US stocks as a substantial rally was almost completely wiped out in the last two hours of trading. In the early afternoon, the Dow Jones Industrial Average was up over 400 points but declines during the rest of the session brought the index back down to just a 0.2% gain. It was a very similar pattern of trading for both the S&P 500 and the Nasdaq 100 although the Nasdaq did manage to finish with an 0.6% gain. These kinds of swings have been characteristic of markets for the last two months and indicate that there has been a fundamental change in market volatility recently.
US bond prices are holding towards recent highs with the 10-year yield sitting at 2.78%. The rally in bond yields from earlier this year has stalled and investors are moving back into bonds, possibly to avoid some of the increased stock market volatility. The gold price has also remained strong and currently trades in the middle of its two-month range.
Oil prices remain rangebound with WTI oil right in the middle of the $60-$65 per barrel range that has largely held since January of this year. US oil inventories had been rising for the past couple of months but the data released last week showed an unexpected draw. This week’s data may be crucial for determining the direction of WTI.
Tonight, US producer price index data will be released which is seen as a leading indicator for the consumer price index. Economists expect just a 0.1% growth in this number for the month of March.
Data Releases:
- US PPI 10:30pm AEST