S&P 500 on track for worst day in four months

September 28, 2021

(Reuters) – The S&P 500 and the Nasdaq were on track for their worst day in four months on Tuesday, hit by weak consumer confidence data and surging Treasury yields.

Below are investor comments about the selloff, which saw the Nasdaq down 2.5% in early afternoon trading as the 10-year Treasury yield hit its highest since June.

(Graphic: S&P dividend yield vs 10-year U.S. Treasury yield, https://ift.tt/3uxkyUF)

PETER CARDILLO, CHIEF MARKET ECONOMIST, SPARTAN CAPITAL SECURITIES, NEW YORK

“It’s all about rising yields.”

“We saw consumer confidence go down, that’s part of it. Part of it is this time of the year and part of it is inflation fears. That’s why investors are hitting the brakes.”

“You have a fear factor that’s real. Powell again acknowledged that inflation is persistent, and that kind of talk continues to fuel bond markets send yields higher.”

“September has lived up to its expectations.”

CHARLIE RIPLEY, SENIOR INVESTMENT STRATEGIST, ALLIANZ INVESTMENT MANAGEMENT

“Today’s interest rate induced selloff is a reminder of how impactful monetary stimulus has been with the Fed signaling a swift removal of the emergency stimulus measures is coming soon. This is an uncomfortable period for market participants as the removal of Fed support will be underway soon and equity markets will have to learn how to stand on their own again.”

LINDSEY BELL, CHIEF INVESTMENT STRATEGIST, ALLY INVEST IN CHARLOTTE, NORTH CAROLINA

“I know consumer confidence today was weak, but I think what you are seeing with the consumer and investors in general is that they’re saying one thing and doing another. While the market is moving lower and consumer sentiment has moved lower, you have recently seen investors jump in and buy the dip.”

“I think there some opportunity on the other side. It’s healthy for markets to correct.”

BRIAN PRICE, HEAD OF INVESTMENT MANAGEMENT, COMMONWEALTH FINANCIAL NETWORK

“It is not surprising to see value and cyclical stocks hold up better than their growth counterparts given the increase in yields. If the Delta variant wave has indeed peaked and we see relaxed travel restrictions and consumers spending money again then I would expect to see some follow through in value outperforming growth.”  

“Some may believe that sentiment has become too ebullient which contrarians believe sets the stage for a market pullback like we’re seeing today. If interest rate increases moderate from here on the back of declining inflation expectations, then it wouldn’t surprise me to see the market resume its march higher as we move into the fourth quarter.”

(Reporting by Noel Randewich in Oakland, California and Stephen Culp in New York)

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