US Stocks’ Peak-Rate Party Gets Spoiled by a Lousy Treasury Sale

The $20 billion 30-year Treasury auction went off at the highest rate since 2007 at 1 p.m. in New York Thursday. Within minutes the S&P 500 Index tumbled, falling as much as 1.2% before regaining its footing. The Cboe Volatility Index, also known as the VIX or Wall Street’s fear index, spiked above 17. And the selloff in the small-cap Russell 2000 Index accelerated, pushing it to it’s lowest close in months.

But sentiment reversed after the 30-year Treasury auction, which drew weak demand and weighed heavily on the broader market sentiment. Swap contracts linked to future interest-rate decisions pushed the odds of another quarter-point hike back to about 50%, up from about 30% as recently as Wednesday. The Treasury auction was awarded at 4.837%, nearly four basis points higher than its yield in pre-auction trading at the bidding deadline. Demand fell short of dealers’ expectations, despite being the highest-yielding long-bond auction of its kind since 2007.“While Treasury auctions really only have an impact on the day of it in terms of market reaction, it’s still a messaging signal on demand,” said Peter Boockvar, chief investment officer at Bleakley Financial Group LLC.

If Thursday’s drop in the S&P 500 holds, it would snap a four-day winning streak — the longest since August — that came after a number of Fed officials said the rout in bond markets may cancel out the need to raise rates again. The message was reiterated on Wednesday, when Fed Governor Christopher Waller said the central bank can watch and see what happens before taking further action.

South Africa South Africa Latest News, South Africa South Africa Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Asia Stocks Set to Follow US Gains on Rate Outlook: Markets Wrap - BNN BloombergAsian stocks are poised to open higher after US equities were buoyed by Wall Street scaling back wagers on Federal Reserve rate hikes. Oil edged lower, following its biggest rally since April.
Source: BNNBloomberg - 🏆 83. / 50 Read more »

Asia Stocks Set to Follow US Gains on Rate Outlook: Markets Wrap(Bloomberg) -- Asian stocks are poised to open higher after US equities were buoyed by Wall Street scaling back wagers on Federal Reserve rate hikes. Oil...
Source: YahooFinanceCA - 🏆 47. / 63 Read more »

Stocks waver after wholesale inflation data surprises: Stock market news todayAfter the PPI update suggests inflationary pressures persist, the focus is on Federal Reserve minutes for insight into whether the era of hikes is over.
Source: YahooFinanceCA - 🏆 47. / 63 Read more »

Stocks waver after inflation data surprise, Fed minutes: Stock market news todayWall Street is looking ahead to consumer inflation data on Thursday for more insight into the Fed's next move.
Source: YahooFinanceCA - 🏆 47. / 63 Read more »

Stocks mixed as CPI inflation holds steady: Stock market news todayStocks were mixed on Thursday as investors digested a September inflation report that some economists believe will keep the Fed on hold in November but could...
Source: YahooFinanceCA - 🏆 47. / 63 Read more »

Stocks drop, bond yields rise as CPI inflation holds steady: Stock market news todayStocks were lower on Thursday as investors digested a September inflation report that some economists believe will keep the Fed on hold in November but could...
Source: YahooFinanceCA - 🏆 47. / 63 Read more »