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As bulls run toward Dow 20,000, these two things could get in the way

With a triple-witching expiration, traders are watching to see if the Dow can crack 20,000.

But they're also watching the aftermath of the Fed's meeting this week, which resulted in a surging dollar and rising Treasury yields. Stock futures were higher Friday, after the market recovered Thursday from Wednesday's rout. The Dow finished Thursday up 59 points at 19,852, off its high but within shouting distance of the 20,000 marker.

The dollar pulled back Friday, after the dollar index reached a 14-year high Thursday, after two days of gains. The dollar and yields jumped after the Fed hiked interest rates a quarter point and upped its forecast for three interest rate hikes next year, instead of two.

A rapid increase in rates or the dollar would be a concern for stock traders.

"For the first time, they're beginning to take that seriously. We can't keep whistling by that strong dollar," said Art Hogan, chief market strategist at Wunderlich Securities. He said some multinationals, like GE, weakened as the dollar rose on Thursday.

Stock traders have also been looking over their shoulder at bond yields, fearing bond vigilantes will run rates up so much that stock market gains will be choked off. The 10-year yield jumped to 2.64 percent in early trading Thursday, but it backed off and was at 2.59 percent Friday morning. The 10-year has moved up from 1.80 percent before the election.

"I think it's got to be closer to 4 percent than it does 3 percent to be a problem. Right now, it's the pace of change that's been eye opening," said Hogan.

The bond market may be volatile, but many Wall Street bond strategists are holding their forecasts for the 10-year below 3 percent for next year. Rick Rieder of BlackRock is one who does see 3 percent by the first quarter, but he doesn't expect it to move much higher after that.

Mark Cabana, head of U.S. short rate strategy at Bank of America Merrill Lynch, said his target is 2.65 percent for the 10-year at the end of 2017, and for now he's keeping it at that level. Strategists at Goldman Sachs have a fourth-quarter target of 2.75 percent next year, and Citigroup strategists are at 2.6 percent in the fourth quarter, 2017.

"The speed of the move has been a little surprising. That said, there's certainly risks to the upside from here. We prefer to just wait and see ultimately how the fiscal policies will shake themselves out, and just wait to see how the growth outlook begins to materialize in the first half of the year before we look to revise them," said Cabana.

Hogan said the stocks could push toward 20,000 Friday, if the triple witching has a positive impact. He said he was watching open interest in the options market around 2,275 on the S&P 500. The S&P 500 ended Thursday at 2,262, up 8.

There are housing starts and building permits data Friday at 8:30 a.m. ET.