U.S. stocks began the week mixed as tech listings outperformed on light data following Friday’s upbeat employment report, while the markets await a heavy week of events, notably the unofficial start of Q2 earnings season and Fed Chair Yellen’s Congressional testimony. Treasuries advanced as the lone report from the domestic docket showed consumer credit expanded more than expected. Gold and crude oil prices were higher and the U.S. dollar was nearly flat. In light equity news, ClubCorp agreed to be acquired by Apollo Management and Abercrombie & Fitch announced that it terminated takeover talks

The Dow Jones Industrial Average (DJIA) dipped 6 points to 21,409, the S&P 500 Index increased 2 points (0.1%) to 2,427, and the Nasdaq Composite increased 23 points (0.4%) to 6,176. In moderate volume, 798 million shares were traded on the NYSE and 1.7 billion shares changed hands on the Nasdaq. WTI crude oil gained $0.17 to $44.40 per barrel and wholesale gasoline was flat at $1.50 per gallon. Elsewhere, the Bloomberg gold spot price gained $1.57 to $1,214.03 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was mostly flat at 96.06.

Consumer credit, released in the final hour of trading, showed consumer borrowing advanced by $18.4 billion during May, well above the $13.5 billion forecast of economists polled by Bloomberg, while April’s figure was adjusted higher to an increase of $12.9 billion from the originally reported $8.2 billion. Non-revolving debt, which includes student loans and loans for vehicles and mobile homes, climbed by $11.0 billion, while revolving debt, which includes credit cards, increased by $7.4 billion.

Treasuries ticked higher as the yield on the 2-year note dipped 2 basis points (bps) to 1.38% and the yield on the 10-year note declined 1 bps to 2.37%, while the 30-year bond rate was flat at 2.93%.

Although the economic front began slowly, this week’s calendar will heat up and is poised to garner heavy attention as the markets grapple with what path the Fed’s monetary policy normalization will take. Bond yields have rebounded from depressed levels hit in mid-June and the U.S. dollar has stabilized from lows hit to close out the first half of 2017.

Schwab Center for Financial Research – Market Analysis Group

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