Stocks Muted Ahead of Ahead Of The Fed’s Next Rate Hike
2:45 pm Monday, September 19th, 2022
The stock market opened to follow-through selling interest, with the major indices sliding between 0.8% and 1.0%. The S&P 500 flirted with Friday’s low (3837), where it found support, before lifting into positive territory midmorning. The major indices have since come off their highs and move sideways near the flat line currently. Rising Treasury yields are weighing on investor sentiment and there’s likely some hesitation, too, ahead of the September 20-21 FOMC meeting and rate hike decision.
The 2-yr note yield reached its highest level since 2007 (3.97%), currently sitting at 3.94%. The 10-yr note yield, which reached its highest level since 2011 overnight (3.51%), sits at 3.47%.
It’s a bit of a mixed market today. While the major indices dance around the unchanged mark, mid caps outperform their peers. The S&P Mid Cap 400 (+0.5%) has maintained a modest gain for most of the session.
Price action for the S&P 500 sectors also paints a mixed picture today as roughly half of the 11 sectors trade up. Materials (+0.8%) and industrials (+0.8%) sit atop the leaderboard while health care (-1.2%) and real estate (-0.8%) bring up the rear.
Homebuilders are one bright spot in the market today after KeyBanc upgraded a number of homebuilder names, including PulteGroup (PHM) and D.R. Horton (DHI). This comes as participants await August Housing Starts and Building Permits tomorrow at 8:30 a.m. ET and August Existing Home Sales at 10:00 a.m. ET on Wednesday, which follows the NAHB Housing Market Index release today.
Energy complex futures saw a reversal of early price action, lifting well off their lows. WTI crude oil futures, which were down below $83.00/bbl, are up 0.5% to $85.15/bbl. Natural gas futures, which dropped below $7.50/mmbtu, are down 0.4% to $7.73/mmbtu.
Today’s economic data was limited to the September NAHB Housing Market Index, which came in at 46 (consensus 48) after the prior reading of 49. A number below 50 for this report is indicative of declining confidence.
