After five straight days of gains and a number of record highs for the S&P 500 heading into July 4th, the post-holiday hangover for bulls continues this morning as US equities are poised for a second straight day of declines. The economic and earnings calendars are light today, so it could end up being a quiet summer day of trading as markets gear up for Powell testimony later this week and the start of earnings season next week.
Read today’s Morning Lineup to get caught up on news and stock specific events ahead of the trading day and a further discussion of the Deutsche Bank news over the weekend.
Friday’s better than expected jobs report put a dent in the narrative for rate cuts as far as the eye could see. However, while the market is now pricing in less than a 5% probability of a 50 bps rate cut at the July meeting versus something closer to a one-three chance at this time last week, there is still 100% certainty that the FOMC will cut rates by 25 bps at the July meeting. So, it’s not as though cuts have been taken off the table.
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