Stocks Hold Steady in Holiday-Shortened Trading; Treasury Yields Rise Amid Global Bond Slowdown

In a session shortened by the holiday, stocks showed minimal movement while Treasury bonds fell, indicating a potential halt in the global bond market’s recent rally.

The S&P 500 ended almost unchanged at 1 p.m. New York time but marked its fourth consecutive week of gains. Shares linked to cryptocurrencies saw an upturn as Bitcoin moved above $37,000. Nvidia Corp. (NVDA) experienced a drop following reports of delaying the release of a new AI chip in China. The yield on ten-year US Treasuries neared 4.5%.

European bond declines, driven by concerns over increased supply, influenced the US Treasury market.

Following a court ruling, Germany will exceed its constitutional borrowing limit for the fourth year, as announced by Chancellor Olaf Scholz’s administration. Andrew Brenner from NatAlliance Securities commented, “On this Black Friday with an early market closure, we’re seeing a significant increase in Treasury yields due to recent developments in Germany.” This follows the court’s decision to suspend Germany’s debt ceiling, leading to a rise in 10-year German Bund yields and influencing other European and US rates.

Michael Hartnett of Bank of America Corp. notes that investors have been rapidly moving into equities, the fastest in almost two years, as bets on peak interest rates increase. Economic reports indicate that employment in US service and manufacturing sectors declined for the first time since mid-2020, impacted by lukewarm demand and high costs, as per a survey by S&P Global.

Global stock funds attracted approximately $40 billion in the fortnight ending November 21, a peak since February 2022, according to Hartnett’s note based on EPFR Global data. However, cash funds continue to lead, with nearly $1.2 trillion added in 2023, compared to $143 billion in equities, while bond funds experienced overall withdrawals.

In corporate news:

• Macy’s Inc. (M) CEO Jeff Gennette reported a successful online Thanksgiving day in an interview with Bloomberg Television.
• Fisker Inc. (FSR) jumped after filing its delayed third-quarter results and announcing a strategy shift to speed up deliveries in the US and Europe.
• Looking ahead to next week, earnings reports from Zscaler Inc. (ZS) and Crowdstrike Holdings Inc. (CRWD) will highlight the growing emphasis on cybersecurity in businesses, while Salesforce Inc. (CRM) and Dell Technologies Inc. (DELL) are anticipated to show slower sales growth amidst tightening corporate spending.