Scott Olson
U.S. stocks on Wednesday opened higher, with Wall Street rebounding from a brutal sell-off in the previous session that saw the benchmark S&P 500 (SP500) slump to its lowest close since early June amid higher for longer rate concerns.
Minutes after the opening bell, the Nasdaq Composite (COMP.IND) was +0.5%, the S&P (SP500) was +0.4% and the blue-chip Dow (DJI) was +0.2%.
The S&P (SP500) fell to a three-month low yesterday, dropping below 4,300, while the VIX (VIX) hit a three-month high. The moves came amid concerns over protracted interest rates and economic data that showed a slide in consumer confidence.
On Wednesday, August durable goods orders came in, with the headline number rising 0.2%, compared with forecasts for a 0.5% decline. Core orders rose 0.4%, stronger than the 0.1% expected.
Rates are retreating from highs. The 10-year Treasury yield (US10Y) fell 5 basis points to 4.51% and the 2-year yield (US2Y) fell 6 basis points to 5.07%.
See how yields are trading across the curve.
Yesterday, “Bloomberg’s aggregate bond index hit a fresh low for 2023 so far,” Deutsche Bank’s Jim Reid said. “The 10yr Treasury yield (hit the) highest closing level since 2007.”
“Similarly, the 30yr yield … also hit a new cycle high of 4.68%. Moreover, it was real yields that continued to drive those moves, leading to another set of milestones across the curve. Among others, yesterday saw the 2yr real yield close at 3.19%, the 5yr real yield close at 2.43%, and the 10yr real yield close at 2.22%. In every case, that’s their highest level since the GFC, and it demonstrates how the impact of higher borrowing costs is still filtering through into the economy.”
