Mixed Treasuries, Bitcoin rallies – US Market Wrap

– Wall Street saw another busy session of bond sales as issuers looked to borrow before key economic data later this week.
– Following a $42 billion auction of seven-year notes and a substantial offering of new corporate debt, Treasury securities were mixed. Building on Monday’s surge, which saw the most sales in a single day this year, seven more issuers stepped up to sell US investment-grade notes.
– Investors are dealing with a decline in expectations for how much the Federal Reserve would decrease interest rates, as well as an influx of new corporate issuance, which has provided yield-seeking investors with numerous options. Traders no longer expect the Fed to lower rates by more than 75 basis points in 2024, aligning their expectations with what policymakers have signalled as the most likely conclusion.
– Shorter-term Treasuries outperformed longer ones. The S&P 500 edged higher. Megacaps were mixed, with Apple up and Nvidia down. Macy’s climbed on plans to close almost a third of its namesake US locations. Chevron and Hess slipped after Exxon Mobil said it’s considering a move that could break up the companies’ $53 billion merger and increase its share of Guyana’s giant offshore oil reserves. Bitcoin hovered near $57,000.
– Traders refrained from making big bets ahead of Thursday’s inflation data and a parade of central bank speakers.
– Fed’s Bowman repeated her expectation that inflation will continue to decline further with interest rates held at their current level – but said it’s too soon to begin rate cuts – joining a raft of officials stressing they’re in no rush to lower borrowing costs.
– The personal consumption expenditures price index will likely validate that stance and possibly further diminish market expectations for a rate cut in the coming months.