S&P 500 Futures Little Changed After Stocks’ Best Week Since ’14

U.S. stocks fluctuated, after the S&P 500 Index posted its best week since 2014, as investors assessed equity valuations amid a fixed-income rout that has sent Treasury yields surging to the highest since January.

The benchmark gauge added 0.2 percent to 2,167.78 at 9:53 a.m. in New York, after rising 3.8 percent last week in the wake of Donald Trump’s presidential election win. The Dow Jones Industrial Average climbed 54.79 points, or 0.3 percent, to 18,902.45 after closing at a record for a second session. The Russell 2000 Index jumped 1.4 percent, rising above its all-time closing high, while the Nasdaq Composite Index was little changed.

“There’s a lot of re-positioning going on in the market rather than the whole market rolling over, with the sectors expected to do well under Trump outshining those which should fare worse,” said Jasper Lawler, a London-based analyst at CMC Markets Plc. “We are starting to see a reallocation according to the fiscal policy.”

Investors on Monday weighed the implications of an intensifying global debt selloff, a strengthening dollar and sliding crude prices. Stocks have outperformed bonds since Trump’s win, on speculation his pledge to spend more on infrastructure will trigger interest-rate hikes amid a pickup in growth and inflation. Equities had their biggest inflows in 17 weeks as bonds saw redemptions, for their largest gap in 12 months, a Bank of America Corp. report on Thursday showed.

Trump’s victory has divided the stock market into winners and losers amid speculation on how policies under the new government will impact those industries. Banks and drugmakers have rallied on optimism a Republican-controlled Congress will ease regulatory oversight, while so-called bond proxy groups such as utilities and real-estate shares declined.

Traders are pricing in an 92 percent chance the Federal Reserve will increase borrowing costs next month. A bevy of Fed officials are scheduled to speak this week, including Chair Janet Yellen who is scheduled to testify on the economic outlook before lawmakers on Thursday. Reports on retail sales and industrial production later this week will also offer investors more clues on the pace of growth.

The S&P 500 closed Friday within 1.2 percent of a record last reached in August, and on track for its best annual advance since 2014. Small caps have also climbed since the election, with the Russell 2000 surging 10 percent last week, its strongest in almost five years.

As the earnings season winds down, Home Depot Inc., Cisco Systems Inc., Gap Inc. and Wal-Mart Stores Inc. are among those reporting this week. Of the S&P 500 members that have already released results, 56 percent beat sales expectations and 76 percent exceeded profit forecasts. Analysts forecast a profit increase of 2.7 percent for the benchmark’s members in the July-September period, snapping five straight quarters of declines.

    Before it's here, it's on the Bloomberg Terminal.