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The major market averages were higher on Tuesday, following the tumble in the previous session. Despite the “Black Monday” talk, markets finished off their opening lows and saw a little buying appetite in the last hour of trading.
Early on and the S&P (SP500) was +1.0%, the Nasdaq Composite (COMP:IND) was +0.7%, and the Dow (DJI) was +0.8%.
The safe-haven demand waned as well, with Treasury prices falling and yields recovering some ground. The 10-year yield (US10Y) rose 4 basis points to 3.83%. The 2-year yield (US2Y) was up 2 basis points to 3.94%.
“We do NOT think (Monday’s) scary px action is a canary in the coal mine in regards to the end of the bull market,” Goldman’s FICC and Equities Trading desk wrote, noting that the market went 356 straight session between 2% declines on the S&P (Feb. 23, 2023 to July 24, 2024).
“Flows were very constructive on our trading desk,” they added, with the desk a 7 out of 10 in terms of overall activity levels.
“Despite the sell-off, the aggregate S&P 500 index still trades at a level (5186) that is 9% higher than at the start of the year (4770),” Goldman strategist David Kostin wrote. “The decline in the index reflects a P/E multiple compression (to 20x) because S&P 500 sales and earnings estimates for 2024 and 2025 have remained unchanged during the past month.”
The Nikkei 225 and Topix indexes also regained ground and were up about 10% on Tuesday after crashing 12% in the previous session.
“The Japanese equity market is behaving with all the decorum and rationality of someone dancing the Hokey Cokey at a family wedding at two in the morning. Economic fundamentals are not driving equity prices,” UBS’ Paul Donovan said.
Meanwhile, the odds of a 50-basis-point rate cut at the September meeting now stand at 75%. They were below 5% before the Fed decision last week.
U.S. international trade in goods and services deficit widened to $73.1B in June.
(Except for the headline, this story has not been edited by PostX News and is published from a syndicated feed.)
