Market Watch: Minimal Shift in Futures as Powell Readies for Capitol Hill Amidst Yield Curve Inversion Concerns | June 21, 2023

As we observe the landscape today, stock index futures, including S&P, Dow, and Nasdaq 100, are showing marginal changes ahead of Federal Reserve Chairman Jay Powell's testimony before the House Financial Services Committee. Given that last week's decision by the Federal Reserve to halt rate hikes came with upward revisions to inflation and growth forecasts, Powell's articulation of this strategy will be closely scrutinized. With July's meeting labeled by Powell himself as 'live', and futures suggesting a 74% likelihood of a rate hike next month, the market remains wary about the implementation of the second hike indicated by the 'dot plot'.

Moving to bonds, the 10-year and 2-year Treasury yields stand unchanged at 3.73% and 4.70% respectively. Notably, the yield curve inversion could intensify during Powell's Q&A, especially considering the 2s10s inversion is currently matching its previous session peak, a 40-year record. Further, new records are being set on the curve; the 1s30s inversion reached -144 basis points, an all-time high in data available since 2002. In individual stock activity, FedEx shares have slipped following disappointing profit guidance. #News #SPX #NDX #DJI #MarketUpdate