Market Commentary S&P 500, Nasdaq hit new records
• The S&P 500 ticked up 0.2% on Monday, reversing earlier losses in the day to close at a record high. The Dow Jones Industrial Average lost 85.6 points, or 0.2%, after being down almost 300 points, and the Nasdaq Composite added 0.7%, to hit its first all-time high since April.
• Reopening stocks led the market lower, with cruise liners, manufacturers and brick-and-mortar-retailers all notching losses. Investors, meanwhile, continued to rotate back into the growth trade, pushing the Nasdaq up a sixth session out of the last seven.
• Treasury yields inched higher but are still down significantly over the past month. The 10-year yield was back at 1.5% on Monday, up 0.04 percentage point. The 30-year Treasury bond yield also gained 0.04 percentage point, to 2.19%, while the 2-year note yield ended less than 0.01 percentage point higher, at 0.16%.
• The discussion in markets continued to be on the resiliency of government bond prices in the face of data showing accelerating consumer prices. A higher inflation rate lowers the real yield on bonds, normally pushing down their prices and lifting their nominal yields to compensate. But after beginning the year at around 0.9% and peaking at nearly 1.75% in late March, the yield on the 10-year Treasury note has drifted lower in eight of the past 10 weeks, including a 0.18 percentage point decline in the past month.
• Up for four consecutive weeks, the Stoxx Europe 600 rose 0.2% Monday, at another record finish. The Nikkei 225 rose 0.7% in Tokyo, while Australian and Chinese markets were closed for holidays. Singapore shares started the week on a slightly sour note with the Straits Times Index down 0.2% at 3,153.14. European stocks are seeing their longest winning streak since April 2019 as reassurances from policymakers this month eased concerns that faster inflation will spur a tapering of monetary stimulus soon.