US stocks posted a slight decline on Monday, but before the day closed, which offset the losses it had earlier. This made the S&P 500 practically the same yesterday, having very minimal change, only a slight 0.08% decrease. Energy and real estate sectors were the leaders of the downturn.
Kingsview Portfolio Manager Paul Nolte said most sectors in the S&P 500 continue to trade above their long-term averages, so it is likely that the market will rally in the coming days despite recent deteriorations.
But growth may be limited as the statements from Atlanta Fed President Raphael Bostic, which urges the central bank to cut bond purchases in the next two to three months in order to boost employment, hints at a future tapering, which could provoke a contraction in the market.
Also, the latest report on US wages reinforced expectations that the Fed will shrink its stimulus soon, not to mention there is another COVID-19 outbreak caused by the highly-contagious Delta strain. All these worry investors who are also closely monitoring the rising price pressures and US inflation data.
Other important events this week are:
- Statements from Cleveland Fed President Loretta Mester and Kansas City Fed President Esther George;
- data on US CPI (Wednesday);
- monthly oil market report from OPEC (Thursday).