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Investing.com — U.S. stock markets opened mixed on Monday, mindful that a strong August labor market report at the end of this week could easily precipitate the first tightening of monetary policy since the pandemic began.
In a keenly-awaited speech on Friday, Federal Reserve Chairman had left the door open to starting the wind-down of the central bank’s asset purchases already this year, saying yet again that the state of the jobs market would be decisive in tipping the Fed’s hand when the time comes. While Goldman Sachs (NYSE:GS) and others now expect an announcement on ‘tapering’ bond purchases at the Fed’s policy meeting in November, some believe that another strong gain in nonfarm payrolls would be enough to make the Fed’s meeting on the xxx of September a ‘live’ one.
“If job figures exceed expectations, we anticipate a tapering announcement already by September’s FOMC and beginning as soon as October,” said Saxo Bank analysts in a morning note. “In that case, we will see yields rising and the yield curve steepening with the 10-year yields rising as high as 1.5% ahead of the Fed meeting. In case job numbers disappoint, tapering may be delayed, something that could push Treasury yields as low as 1.12%, they argued, adding that “any rally would be short-lived, as we expect a revival of reflation trade in autumn.”
By 9:35 AM ET, the Dow Jones Industrial Average was down 14 points, or less than 0.1%, at 35,442 points. The S&P 500 was up 0.1% and the Nasdaq Composite was outperforming with a gain of 0.4%.
Affirm Holdings (NASDAQ:AFRM) was the most conspicuous of early winners, rising over 43% after announcing that Amazon will carry its buy-now-pay-later solutions on its website. It’s the latest eye-catching deal involving a segment of the fintech sector that has become increasingly fashionable, although it is nowhere near as big as Square’s recent $29 billion bid for Australia’s Afterpay. Swedish BNPL fintech Klarna meanwhile was valued at $45 billion in the funding round it completed earlier this month. Amazon (NASDAQ:AMZN) stock rose 0.8%, meanwhile.
Elsewhere, Moderna (NASDAQ:MRNA) stock fell 4.0% after the discovery of more contaminated shots of its Covid-19 vaccine in Japan. Some 3.6 million shots of Moderna’s vaccine have now been suspended.
