Stocks Mixed in Cautious Trading…..

U.S. equities finished mixed, with the S&P 500 and Nasdaq prolonging their campaign of posting record highs. The markets continued to show resiliency in the face of a number of potential headwinds, including Delta variant worries, recently flared-up geopolitical issues, and the impact of Hurricane Ida, which made landfall in the U.S. over the weekend. However, the gains were muted, as investors appeared cautious ahead of a host of global manufacturing and services reports that are due out this week, as well as Friday’s key August nonfarm payroll report. The data will come on the heels of last Friday’s highly-anticipated speech from Fed Chairman Jerome Powell that kept Q4 tapering expectations intact but also seemed to calm concerns about when the first rate hike will take place. In economic news for today, pending home sales came in softer than expected, and a read on regional manufacturing activity tumbled, but remained in expansion territory. The equity front was relatively light, but Affirm Holdings rallied after late-Friday’s announcement of a partnership with Amazon.com. Treasuries were higher, applying modest downside pressure on yields, and gold was lower, while crude oil prices gained modest ground, and the U.S. dollar was little changed. Europe finished mixed in a lackluster session, while markets in Asia were higher.

The Dow Jones Industrial Average shed 56 points (0.2%) to 35,400, while the S&P 500 Index gained 19 points (0.4%) to 4,529, and the Nasdaq Composite increased 136 points (0.9%) to 15,266. In moderate volume, 704 million shares were traded on the NYSE and 4.0 billion shares changed hands on the Nasdaq. WTI crude oil moved $0.47 higher to $69.21 per barrel. Elsewhere, the gold spot price lost $6.60 to $1,812.90 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was unchanged at 92.69.

Housing data misses to begin week that will feature key labor and business activity reports

Pending home sales declined 1.8% month-over-month (m/m) in July, versus the Bloomberg consensus estimate of a 0.3% gain, and following June’s negatively-revised 2.0% decline. Sales fell 9.5% year-over-year (y/y), on the heels of June’s upwardly-revised 3.5% drop. Pending home sales reflect contract signings and are a gauge of the pipeline of existing home sales.

The August Dallas Fed Manufacturing Index fell more than expected but remained in expansion territory (a reading above zero). The index dropped to 9 from 27.3 in July and compared to forecasts calling for a decline to 23.0.

Treasuries ticked higher, as the yield on the 2-year note was down 1 basis point (bp) at 0.21%, while the yields on the 10-year note and the 30-year bond were 3 bps lower at 1.28% and 1.89%, respectively.

The markets continued to digest Friday’s key speech from Federal Reserve Chairman Jerome Powell at the Kansas City Fed’s annual monetary policy symposium, in which he kept the door open for the beginning of the Central Bank’s tapering of monthly asset purchases sometime in Q4.

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