Australia stocks rise ahead of central bank minutes; New Zealand inflation hits 2-year low

Small-cap stocks were on investors’ radar last week.

The Russell 2000 index turned in five straight days of gains for the first time since mid-July, according to CNBC analysis.

And so investors may want to consider that particular asset class, especially amid rising volatility, according to some fund managers and analysts.

Here’s how to invest, with analyst favorites to consider.

Subscribers can read more here.

— Weizhen Tan

UBS chief investment officer Mark Haefele says the yield on the 10-year Treasury could pull back below 4% by the middle of next year, while the S&P 500 ticks up to 4,500.

“This is a great time for people to get their portfolios more in balance because we see positive returns across cash, bands and equities. When we look out towards the middle of next year, we can see the S&P 500 probably [at] about 4500 and we can see the 10-year at about 3.5%,” Haefele told CNBC’s “Squawk on the Street” on Monday. “If we have a hard landing…you can get lower than that.”

Haefele added that so-called bond vigilantes aren’t overly concerned with the prospect of a U.S. default, which underpins his thesis for a dip in the benchmark 10-year Treasury.

— Brian Evans

Philadelphia Federal Reserve President Patrick Harker on Monday acknowledged that the central bank’s interest rate hikes have been a significant factor in the home price surge.

In a speech to the Mortgage Bankers Association, Harker noted that he has received many comments about housing affordability., “And I am also fully aware of the way the actions we on the [Federal Open Market Committee] have taken over the past 18 months in our efforts to tame inflation and get it back down to our 2% annual target have, in their own way, contributed to the current mortgage climate,” he said.

The central bank official repeated his belief that the Fed doesn’t need to raise rates again this cycle while also affirming his commitment to fighting inflation.

The National Association of Realtors’ housing affordability index, a new data point started in 2022, recently reached the lowest level in its short history. Harker said one refrain he has heard continuously is, “There are no first-time home buyers.”

—Jeff Cox

Shares of five pharmaceutical stocks in the S&P 500 hit lows not seen in at least a year on Monday.

Moderna lost more than 8% at its lowest level of the day, trading at a price not seen since November 2020. Similarly, Baxter retreated to its lowest level since August 2012, Illumina traded at lows not seen since December 2016 and Ball shed 2% to trade at lows not seen since December 2018. Kenvue also traded at its lowest level ever since its spinoff from Johnson & Johnson in May 2023.

Shares of healthcare firms like Pfizer have recently come under pressure as demand for Covid treatments and vaccines have waned.

— Lisa Kailai Han, Gina Francolla

All 11 sectors of the S&P 500 traded higher on Monday in a broad rally that helped push the index up more than 1%.

Consumer discretionary was the best performing sector with a gain of more than 1.5%. V.F. and Etsy led the sector higher, both rallying more than 4%. CarMax was the only stock in the sector on track for losses, shedding 0.1%.

Communication services and materials were the next best performers of the 11 sectors, with each adding around 1.4%.

Energy saw the most restricted gains, rising just 0.7%. While Valero and Devon each climbed more than 2%, EQT‘s 0.7% slip weighed on the sector.

— Alex Harring