However, it would pick up in the medium term as energy prices recover from their rock-bottom levels and the labor market gains more traction. Oil prices fell on Monday as analysts said they doubted upcoming producer talks would rein in oversupply.
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“The markets now have March priced in for the next rate hike, and if Yellen is seriously determined to move earlier, she must take advantage of Friday’s opportunity to drive that message home”, said Craig Erlam, senior market analyst at Oanda, in a note. Pfizer is buying Medivation for its heavily used prostate cancer drug Xtandi, which generates roughly $2 billion in sales a year.
The Medivation deal pushed other biotechnology stocks higher as well. Regeneron Pharmaceuticals, Vertex Pharmaceuticals and Alexion Pharmaceuticals all were up 3 percent or more.
The S&P 500 index showed five new 52-week highs and no new lows, while the Nasdaq recorded 24 new highs and six new lows.
He argued that core inflation was within “hailing distance” of the bank’s two percent target while employment had increased “impressively” since its low point in early 2010. U.S. West Texas Intermediate (WTI) crude for September was down over $1.25, or 2.6 percent to $47.27 per barrel.
Central Bank Symposium, Yellen Speech Likely to Cause VolatilityWithout any economic reports to react to, investors attributed the volatile price swings to thin trading conditions ahead of the start of the central bankers’ symposium later in the week and a key speech by Fed Chair Janet Yellen early Friday.
The Federal Reserve is close to hitting its targets for full employment and 2% inflation, the Fed’s No. 2 policymaker said on Sunday in comments that did not address when the US central bank should next raise interest rates.
The Fed has been suggesting it could raise rates in 2016 since it tightened policy in December for the first time in almost a decade, but investors have doubts the central bank will follow through on that guidance. Second quarter earnings season is effectively over and the next major piece of economic data does not come until Friday, when Yellen will speak. Jeffrey Saut, chief investment strategist at Raymond James, said the firm’s trading model had called for a short-term trading top heading into last Friday’s option expiration, with the potential for further selling if the S&P 500 breaks below 2,175.
The U.S. dollar rose Monday in Asian trade on renewed hopes for a possible U.S. rate hike this year following hawkish comments from the vice chairman of the Federal Reserve.
The yield on the benchmark 10-year Treasury note recently was 1.554%, according to Tradeweb.
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A week of talking up the U.S. dollar will be good for United States financial stocks that would benefit from a rate rise and some of that positivity could spread over into financials globally.
