Monday's Market Minute: Investors Eyeing Rising Interest Rates

This week, the focus for investors and traders is earnings, ecodata, and interest rates on the rise. We begin with 2-year yields at levels not seen since 2007, a reflection of the strong economic data we’ve had since the Non-farm payrolls report that started off the month. The data sparked a shift in tone from the Fed and now has many calling for a more aggressive pace of hikes to drive inflation back to the targeted 2%, as the “higher for longer” mantra grows. It’s not just the spike in yields; the spread between the 2-year and the 10-year continues to invert and is near 90bps adding to growing recession concerns.

In terms of data due out this week, we start off Monday with Durable Goods Orders and Pending Home Sales. Tuesday, keep an eye on Chicago PMI, the Richmond Fed Manufacturing Index, the Case-Shiller Home Price Index, and FHFA House Price Index. Wednesday, the focus will be on the PMI and the ISM Manufacturing data in addition to the Construction Spending numbers that are due out. Thursday and Friday, we have Jobless Claims, Productivity and Costs, the Fed’s Balance Sheet, the PMI Composite Final, and ISM Services Index. Look out for a couple of Fed speakers – Raphael Bostic and Thomas Barkin – on Friday as well.

As far as companies reporting quarterly results, this week we have Costco (COST), Target (TGT), Lowe’s (LOW), Kroger (KR), Dollar Tree (DLTR), Zoom Video (ZM), AMC (AMC), Salesforce (CRM), Best Buy (BBY), Zscaler (ZS), Dell (DELL), and Broadcom (AVGO) to name a few.

Lastly, some comments from the International Monetary Fund are making headlines as we begin the week. IMF Managing Director Kristalina Georgieva said “we are not seeing inflation going down to target fast enough,” and “ Central banks need to stay the course until we are comfortable that price stability is returning.” So, it’s not just the Fed here in the U.S. pushing for higher for longer…

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