Friday’s stunningly weak jobs report did raise expectations on Wall Street that the Fed will cut interest rates at its next meeting in September. That caused Treasury yields to slump in the bond market, and they were mixed on Monday.
The yield on the 10-year Treasury eased a bit to 4.20 per cent from 4.23 per cent late Friday.
The two-year yield, which moves more closely with expectations for Fed action, held at 3.69 per cent from late Friday.
“In our view, if the Fed starts to cut rates at its September meeting, we believe this would be supportive for markets,” according to David Lefkowitz, head of US equities at UBS Global Wealth Management.
Such hopes, combined with profit reports from big US companies that have largely come in better than expected, could help steady a US stock market that may have been due for some turbulence. Before Friday, the S&P had gone more than a month without a daily swing of 1 per cent, either up or down.
This upcoming week may feature fewer fireworks on Wall Street following last week’s jobs report and profit updates from some of the US stock market’s most influential companies. This week’s highlights will likely include earnings reports from Disney, McDonald’s and Caterpillar, along with updates on US business activity.
On Wall Street, Wayfair jumped 10.3 per cent after the retailer of furniture and home decor said accelerating growth helped it make more in profit and revenue during the spring than analysts expected.
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Tesla rose 2.1 per cent after awarding CEO Elon Musk 96 million shares of restricted stock valued at approximately $US30 billion ($46 billion). The move, coming six months after a judge ordered the company to revoke his massive pay package, could remove potential worries that Musk may leave the company.
American Eagle Outfitters shares surged after Trump came out in support of a controversial ad from the company.
The spot, with the actress Sydney Sweeney, is the “HOTTEST ad out there,” Trump said in a social media post. He added American Eagle jeans are “flying off the shelves.” Trump deleted an earlier post, in which the actress’ first name was misspelled
The stock jumped as much as 18 per cent, the biggest gain intraday since May 12. Through last week’s close, the shares had declined 36 per cent this year.
CommScope soared 89.5 per cent after reporting a stronger-than-expected quarterly profit and saying that it will sell its connectivity and cable business to Amphenol for $US10.5 billion in cash. Amphenol rose 3.1 per cent
They helped offset a drop of 12.9 per cent for On Semiconductor, which only matched analysts’ expectations for profit in the latest quarter. The company, which sells to the auto and industrial industries, said it’s beginning to see “signs of stabilisation” across its customers.
Boeing was mostly unchanged after workers who build fighter jets for the troubled aerospace giant went on strike overnight.
In stock markets abroad, indexes rose across much of Europe and Asia.
South Korea’s Kospi rose 0.9 per cent, and France’s CAC 40 climbed 1.1 per cent, while Japan’s Nikkei 225 was an outlier with a drop of 1.2 per cent.
AP, Bloomberg
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