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LIVE MARKETS-10-year Treasury yields en route for 1.90% in the coming months - JPM

reuters.com · 09/01/2021 09:45
LIVE MARKETS-10-year Treasury yields en route for 1.90% in the coming months - JPM

S&P 500, Nasdaq edge up, Dow slips

Tech leads major S&P sector gainers; materials weakest group

Euro STOXX 600 index up ~0.4%

Dollar, crude decline; gold, bitcoin rise

US 10-Year Treasury yield ~1.29%

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BENCHMARK 10-YEAR TREASURY YIELDS EN ROUTE FOR 1.90% IN THE COMING MONTHS - JPM (0940 EDT/1340 GMT)

The U.S. benchmark 10-year Treasury yield is likely to rise to 1.90% in the coming months after potentially forming a reversal pattern, but first it needs to break above the key 1.40% level, according to analysts at JPMorgan.

The yield has bounced from a possible double bottom of 1.128% on July 20 and 1.127% on August 4, levels that the bank said were overbought in Treasuries. Now that this trend has decelerated JPMorgan is “looking for an eventual release to higher yields.”

The 1.40% area, which is close to the top end of the T-Note's recent trading range, needs to be broken in order to take yields higher still, analysts including Jay Barry and Jason Hunter said in a report sent late on Tuesday.

“We believe a move through the 1.40% inflection is required to create a bearish medium-term momentum dynamic, in which selling pressure has an increased chance of creating more selling pressure,” they said.

The 10-year yield US10YT=RR is around 1.29% on Wednesday.

Several trend-following signal thresholds also sit between 1.45% and 1.60% and a break through support in the mid-1.40% area would “open the door for a rapid trend to retest” the 1.79% level, JPMorgan said.

Longer-term support for the 10-year Treasury then resides in the 1.90% area, “levels we believe the market to attain in the months ahead,” they said.



(Karen Brettell)

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IS TIME FOR A SEPTEMBER MOURN? (0900 EDT/1300 GMT)

The S&P 500 .SPX rose for a 7th straight month in August, which is its longest such streak since a 10-month run of gains ending in January 2018. The benchmark index advanced 2.9% last month and is now up 20.4% year-to-date, which has it on track for its biggest yearly rise since a 28.9% advance in 2019.

That said, the S&P 500 is about to enter its worst month of the year.

Using Refinitiv data back to 1928, September has been the worst month, on average, for the S&P 500. It's average change is a decline of 1%:



Of note, through Tuesday, it has now been 342 calendar days since the SPX last ended a decline of more than 5% on a closing basis.

Interestingly enough, that decline developed in the wake of the S&P 500's September 2, 2020 high, from which it slid 9.6% into its September 23, 2020 low.

Additionally, from 1928 to 2020, there were 31 Augusts with a gain of more than 2%. However, in those instances, the S&P 500's average change for the rest of the year was a gain of only about 0.5%.

Therefore, whether this September lives up to its reputation or not, the broad-market average may face a struggle from now to the end of the year. nL1N2Q20R6


(Terence Gabriel)

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FOR WEDNESDAY'S LIVE MARKETS' POSTS PRIOR TO 0900 EDT/1300 GMT - CLICK HERE: nL8N2Q33CJ











SPXMonthlyAvgret09012021https://tmsnrt.rs/3tbXDNN

10-year note yieldshttps://tmsnrt.rs/3Bvoffz

(Terence Gabriel is a Reuters market analyst. The views expressed are his own)