Last Updated: 4:02 PM EST
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Stock indices finished today’s trading session in the red amid a slew of economic data and fedspeak. Indeed, the Nasdaq 100 (NDX), the S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) fell 0.69%, 0.21%, and 0.16%, respectively.
On Thursday, the Census Bureau released its retail sales report which calculates the change in sales spending at retailers. Overall, spending increased by 3.92% year-over-year and 0.4% month-over-month. Economists had forecast a 0.6% month-over-month increase.
Furthermore, the Department of Labor put out its Initial Jobless Claims report, which came in worse than expected. In the past week, 217,000 people filed for unemployment insurance for the first time. Expectations were for 210,000 individuals.
Separately, Federal Reserve Governor Christopher Waller said that inflation is getting closer to the Fed’s 2% target, which could allow the central bank to start cutting interest rates sooner than expected. Speaking on CNBC, Waller mentioned that a key inflation measure, the Personal Consumption Expenditures Price Index (excluding food and energy), has been near the target for most of the last eight months. If this trend continues, the Fed could consider lowering rates in the first half of the year.
Waller suggested that if inflation keeps dropping and the job market stays strong, the Fed might cut rates three or four times this year. He even mentioned the possibility of starting as early as March, depending on how quickly inflation improves. His comments signal that the Fed may act sooner than many thought, especially as it prepares for its upcoming meeting at the end of January.
The market reacted quickly to Waller’s optimistic tone. Investors now expect the Fed to cut rates earlier, with the first reduction possibly in May, and two rate cuts likely in 2025. Bond yields dropped as traders adjusted to the idea of faster monetary easing
First Published: 4:09 AM EST
U.S. stock futures traded modestly higher on Thursday morning, following a strong market rally in the previous session. Futures on the Nasdaq 100 (NDX), the Dow Jones Industrial Average (DJIA), and the S&P 500 (SPX) were up 0.63%, 0.07%, and 0.35%, respectively, at 3:52 a.m. EST, January 16.
On Wednesday, all three major indexes witnessed strong gains. The Dow Jones, the S&P 500, and the Nasdaq Composite rose 1.65%, 1.83%, and 2.45%, respectively. The rally was fueled by a lower-than-expected December Consumer Price Index (CPI) report, which eased concerns about the Federal Reserve’s monetary policy stance. Also, the 10-year US Treasury yield declined sharply, supporting positive sentiment in the market.
It is worth noting that strong bank earnings also contributed to the positive market mood. JPMorgan Chase (JPM), Wells Fargo (WFC), Goldman Sachs (GS), Citigroup (C), and Bank of New York Mellon (BK) all reported strong financial results, exceeding market expectations.
Looking ahead, investors are awaiting key economic data releases, including the December Retail Sales report and the Weekly Jobless Claims data, for further insights into the health of the U.S. economy.
Today, traders will also watch earnings reports from major companies like Morgan Stanley (MS), UnitedHealth (UNH), PNC Financial Services (PNC), Bank OZK (OZK), and Bank of America (BAC).
Meanwhile, the U.S. 10-year treasury yield was down, floating near 4.667%. Simultaneously, WTI crude oil futures are trending higher, hovering near $80.11 per barrel as of the last check.
Elsewhere, European indices opened higher on Thursday buoyed by renewed hopes that the Fed might continue cutting interest rates this year. Also, strong results from Cartier-owner Richemont (GB:0QMU) stock boosted market sentiment.
Asia-Pacific Markets Ended Higher on Thursday
Most of the Asia-Pacific indices were in the green today as investors cheered favorable inflation data from the U.S.
At the same time, Hong Kong’s Hang Seng Index was up 1.23%. Also, China’s Shanghai Composite and Shenzhen Component indices gained 0.28% and 0.41%, respectively. Further, Japan’s Nikkei index climbed 0.33%, while the Topix index fell 0.09%.
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