Last Updated: 4:20 PM EST
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Stock indices finished today’s trading session in the green. The Nasdaq 100 (NDX), the S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) gained 1.67%, 1.26%, and 0.8%, respectively.
Earlier today, The Atlanta Federal Reserve updated its latest GDPNow reading, which allows it to estimate GDP growth in real-time. The “nowcast” becomes more accurate as more economic data is released throughout the quarter. Currently, it estimates that the economy will expand by about 2.4% in the fourth quarter. This is lower than its previous estimate of 2.6%, which can be attributed to this morning’s Manufacturing ISM Report on Business from the Institute for Supply Management
Indeed, the report measures the month-over-month change in production levels. A number over 50 represents an expansion, whereas anything below 50 means a contraction. Today’s results came in at 49.3, which was better than the expected 48.2.
Although this indicator is higher compared to last month’s reading of 48.4, it’s still in an overall decline and has been steadily contracting ever since the end of 2022. Indeed, this is the nineth consecutive month where manufacturing has contracted.
Separately, Richmond Fed President Tom Barkin thinks interest rates should stay high for longer because inflation and economic growth could still rise more than expected. While inflation is slowing, it’s not yet at the Fed’s 2% goal, and Barkin is worried that new tariffs or rising wages could push prices back up. He is also optimistic about the strong job market and believes future surprises are more likely to be positive for growth rather than negative.
First Published: 3:44 AM EST
U.S. stock futures edged higher on Friday morning following a weak start to the new year’s trading session. Futures on the Nasdaq 100 (NDX), the Dow Jones Industrial Average (DJIA), and the S&P 500 (SPX) were up 0.37%, 0.16%, and 0.24%, respectively, at 3:09 a.m. EST, January 3.
Yesterday, all three major indices witnessed losses, with the Dow Jones, the S&P 500, and the Nasdaq Composite down 0.36%, 0.22%, and 0.16%, respectively. This marked the fifth consecutive day of declines for the S&P 500 and the Nasdaq, while the Dow saw its fourth consecutive day of losses.
It must be noted that the chief investment strategist of the Leuthold Group, Jim Paulsen, has expressed concerns about a potential 10%-15% stock market correction in 2025. Paulsen believes that if the bull run on Wall Street continues, economic growth will gradually slow down. He also warned that U.S. investors might be overlooking the risk of an economic slowdown, which could lead to a market pullback if recession fears grow.
In major stock market news, Tesla (TSLA) shares fell 6.1% after reporting lower-than-expected deliveries for 2024. Also, Apple (AAPL) declined 2.6% due to concerns about slowing iPhone sales in China.
Moving ahead, investors are awaiting the release of the ISM Manufacturing Index today. Additionally, comments from Federal Reserve officials will be closely monitored for insights into the central bank’s monetary policy outlook.
Meanwhile, the U.S. 10-year treasury yield was down, floating near 4.541% at the time of writing. At the same time, WTI crude oil futures are trending higher, hovering near $73.15 per barrel as of the last check.
Elsewhere, European indices opened lower on Friday morning as traders weighed the impact of political instability in France, potential tariffs under the incoming Trump administration, and upcoming elections in Germany.
Asia-Pacific Markets Traded Mixed on Friday
Asia-Pacific indices were mixed today as investors reacted to the People’s Bank of China’s comments that it may lower interest rates in 2025.
At the same time, Hong Kong’s Hang Seng Index was up 0.63%. However, China’s Shanghai Composite and Shenzhen Component indices declined by 1.57% and 1.89%, respectively.
It must be noted that Japan’s stock market remained closed today for New Year holidays and will reopen on January 6, 2025.
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