The Dow Jones Industrial Average (DJIA) was hamstrung near Monday’s opening bids at the start of a fresh trading week. The major equity index stuck close to the 42,200 level, with stock traders eyeing data risks and rate markets grappling with the odds of a follow-up cut from the Federal Reserve (Fed) in November.
Market focus will be slowly swinging around toward Friday’s US Nonfarm Payrolls report as investors look for further data on the state of the US economy. Rate traders continue to muse over November’s Fed rate call, with odds tipped slightly in favor of a meager 25 bps cut. However,m many market participants are still hoping for a follow-up double cut for 50 bps when the Fed gathers again for another rate call on November 7.
A looming port strike along the East and Gulf Coasts is hampering investor expectations for economic activity in the near term, crimping investor demand and cooling stock advances. Adding to downside pressure in equities, Fed officials drew a line in the sand on Fed rate cuts, noting that it would take a further deterioration of the US labor market to spur further large moves from the Fed. This proposition weighs poorly on otherwise rate-cut-hungry market participants, as further declines in jobs data would signal greater risk of an impending US recession.
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