Today’s Trading Activity – Dow Climbed to 25,000 as Curve Flattened to New Cycle Low
Jan 4, 2018
Thursday marked another milestone for U.S. equities as the Dow closed above 25,000 for the first time in history. The blue-chip index was Thursday’s top performer with its 0.61% move higher outpacing smaller gains of 0.40% and 0.18% for the S&P and Nasdaq. As the index crossed its latest milestone, the push higher accelerated and sent the Dow to an intraday high of 25,105 (closed at 25,075). Materials and financials led the Dow’s gains and were also the top two performers (in reverse order) within the S&P. Only two of the 11 S&P sectors, utilities and real estate, lost value. Despite the exuberance for equity investors, an early morning sell-off in Treasurys moderated somewhat, more so in longer maturities. After rising as much as 4 bps just after U.S. trading opened, the 2-year yield settled up 2.0 bps at 1.95%, a new high for the cycle. Other maturities seven years and in made similar shifts while changes in longer maturity were more muted. The 10-year yield added just a 0.5 bps to 2.45%, taking the spread between 2s and 10s below 50 bps (49.7 bps) for the first time since October 15, 2007. As the curve flattened, the Dollar dropped to match its weakest level since mid-September.