Markets on Thursday finished in the red across the board but little changed with the Dow losing 0.2%, the Nasdaq falling by the same amount, and the benchmark S&P 500 losing 0.1%.
The long end of the yield curve, however, continued to see yields rise with the 10-year Treasury yield hitting 3.11% for the first time since 2011 to mark another 7-year high.
The small cap Russell 2000 also made a new high on Thursday, rising 0.5% as the index, which is more levered to the U.S. economy and sensitive to the value of the dollar, continues to outperform the S&P 500 this year.
Wall Street analysts expect Deere to earn $3.31 per share on revenue of $9.8 billion, according to estimates from Bloomberg. Investors will also be interested in any commentary from the agricultural giant on the effect trade tensions between the U.S. and China are having, or are expected to have, on the company’s business.
FILE – This Sunday, June 8, 2014, file photo shows John Deere farming equipment at a dealership in Petersburg, Ill. Deere & Co. reports earnings, Friday, Aug. 18, 2017. (AP Photo/Seth Perlman)
Meanwhile, Campbell’s Soup should report earnings per share of $0.60 on revenue of $2.1 billion. Investors will also be looking for an update on its integration with Snyder’s-Lance, a deal the company completed in March.
And so while markets this week have seen headline stock market moves become less volatile as we move out of earnings season, the next big catalyst for investors is right around the corner. Or, perhaps, is already here.
And that is higher interest rates.
We’re now a bit less than four weeks out from the Federal Reserve’s next monetary policy decision where it will likely raise its benchmark interest rate target by 0.25% and give an update on its outlook for the economy.
But the market is beginning to price in this action before the event even happens.
This week, we saw the 10-year yield hit a new high as investors start to price in four rates from the Federal Reserve this year. And while investor concerns over rising rates were seen as the proximate cause of the market stress that began back in early February, this dynamic hasn’t really changed.
The market’s reaction, all things considered, hasn’t either. Earnings have been great. The economy is doing well. And stocks are going nowhere. Mostly because rates are rising.
And how much more action investors start to brace for from the Fed already has and, will likely continue to, determine the stock market’s moves, which have so far resulted in the market running in place.
Myles Udland is a writer at Yahoo Finance. Follow him on Twitter @MylesUdland