Nasdaq-100 Index Continues 14-Week Rally on Mondays
For the 14th consecutive week, the Nasdaq-100 Index, which tracks large-cap, nonfinancial stocks traded on the Nasdaq Stock Market, rose on the first trading day of the week. This unusual streak has not been broken since June 26. Even holidays, such as Labor Day and the 4th of July, did not interrupt the momentum. Despite this consistent Monday rally, the overall performance of the Nasdaq-100 Index has only seen modest declines during this period, without any substantial follow-through gains.
Muni Bonds Could See Opportunity at the End of the Year
According to the Wells Fargo Investment Institute, municipal bonds historically experience a pullback in September and October. However, they tend to see a surge in November and December. In September 2022, municipal bonds had a negative return of -3.8%, marking the worst month of performance since 2018. Conversely, in November of the same year, muni bonds had a significant return of 4.7%, the best monthly performance in recent years. The Wells Fargo Investment Institute suggests that a market pullback may present a favorable entry point for investors, particularly in sectors such as tobacco, transportation, and healthcare, which have outperformed the broader muni market.
Stock Futures Open Steady After Treasury Yields Rise
Following a session that saw a rise in the 10-year Treasury yield to its highest level since 2007, stock futures opened relatively unchanged on Monday. Dow Jones Industrial Average futures dipped slightly by 0.01%, while S&P 500 futures increased by 0.03%. Nasdaq 100 futures ticked up by 0.04%. These developments come after the recent surge in treasury yields, drawing attention to potential impacts on the stock market.
Overall, the Nasdaq-100 Index’s consistent Monday rally demonstrates a peculiar trend, but its lack of follow-through gains suggests caution. Municipal bonds may provide a buying opportunity towards the end of the year, despite the historical negative performance during September and October. Finally, the stability of stock futures after the recent rise in treasury yields indicates cautious market sentiment.