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Eurostoxx +0.1%, Germany DAX +0.2%, France CAC 40 +0.1%, UK FTSE flat & Spain IBEX +0.1%
Overall, mood remains cautious, with US futures heading slightly lower. After yesterday’s dip, technology remains the laggard. S&P 500 futures are down 0.1 percent, Nasdaq futures are down 0.3 percent, and Dow futures are near flat.
However, be mindful of the bond market. However, Treasury rates are currently a little lower. After encountering technical resistance on the topside of its wedge pattern, 10-year rates fell 1.7 basis points to 1.649 percent.
- 10-year Treasury bond rates reach important barrier from the topside of its previous wedge formation.
- Treasuries selloff pauses at vital point.
- Treasuries were substantially sold off at the start of the year, causing long-end rates to rise, but the advance has now paused.
- This occurs as yields encounter crucial resistance from the topside of the wedge formation, as previously mentioned. 10-year rates are presently down 2 basis points to 1.645 percent.
- As a result, the USD/JPY has lost some ground this week, with the pair trading slightly around 116.00.
- If yields remain more rangebound, some of the potential activity foreshadowed by the moves earlier this week may be limited.
- However, if there is a breakthrough, it will surely make things extremely intriguing to begin the new year.
- If the latter scenario occurs:
- This will create a stronger encouragement for USD/JPY to remain with the previously noted breakout. Higher rates may be a concern for stocks, but there isn’t much of a problem unless we move over the March 2021 highs above 1.75 percent. Even yet, one might argue that a rise closer to 2% would be important in dampening markets sentiment. Otherwise, if the move does not go too far or too quickly, stocks may be able to breathe a bit better.
- All of this remains true as we await the release of the FOMC meeting minutes later today and the US non-farm payrolls report on Friday.
Citi increases its S& P 500 year-end forecast to 5,100.
The business originally forecasted the S&P 500 at 4,900 at the end of this year, implying a roughly 6% increase from present levels. It may not appear to be much, but keep in mind that the case scenario most likely includes the most volatile changes we’ll see during the year. In any event, here are some more analysts’ estimates for the S&P 500.
- Morgan Stanley – 4,400
- Bank of America – 4,600
- Barclays – 4,800
- UBS – 4,850
- JP Morgan – 5,050
- Goldman Sachs – 5,100
- Deutsche – 5,250