S&P 500 sets record as earnings season approaches
SPY•The S&P 500 and Nasdaq set record highs as third-quarter earnings season approached, with consensus forecasts calling for a 30% annual rise in profits. Treasury term premium reached 96 basis points, its highest in 12 years, as markets faced heavy debt sales.
1. Stocks and earnings
The S&P 500 joined the Nasdaq in setting a record high Tuesday, its first in about six weeks, ahead of the start of third-quarter earnings season. Consensus forecasts point to a 30% annual increase in July-September profits, with artificial intelligence expected to lead gains.
2. Treasury market pressures
Treasury yields remained near 24-year highs as the government prepared to sell 10-year and 30-year notes after a 3-year auction Tuesday. The New York Fed's estimate of the 10-year Treasury term premium climbed to 96 basis points, its highest in 12 years.
3. Fed and Europe
The Fed was scheduled to release minutes from its September meeting Wednesday. The Atlanta Fed's GDPNow estimate eased to 3.7% from a previous high of 5.1%. French government debt risk premia versus Germany widened last month to their highest in 15 years, while euro zone debt markets calmed somewhat Tuesday.
