Last Updated 4:05 PM EST
Stock indices finished today’s trading session mixed. Indeed, the Dow Jones Industrial Average (DJIA) fell 0.22%, while the S&P 500 (SPX) and the Nasdaq 100 (NDX) gained 0.01% and 0.83%, respectively.
The utilities sector (XLU) was the session’s laggard, as it lost 4.67%. Conversely, the technology sector (XLK) was the session’s leader, with a gain of 1.11%. Indeed, a quick look at the S&P 500 heatmap shows heavy losses among utility stocks in contrast to the very little red in the tech sector. Overall, though, there wasn’t much green throughout the entire index.
Furthermore, the U.S. 10-Year Treasury yield increased to 4.69%, an increase of 11 basis points. Similarly, the Two-Year Treasury yield also increased, as it hovers around 5.12%.
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 4.9% in the third quarter.
This is unchanged compared to the previous estimate, which can be attributed to this morning’s data releases from the U.S. Census Bureau and the Institute for Supply Management.
Last Updated: 2:30PM EST
Stocks are mixed so far in today’s trading session. Wells Fargo analysts recently discussed the impact of the U.S. resuming student loan payments after a three-year hiatus due to the COVID-19 pandemic. They predict this return to payment, which affects about 43 million borrowers, will only slightly dampen discretionary spending.
The economists point out that while the nation’s student debt stands at over $1.6 trillion, the largest debts (those above $100K) impact just 7% of borrowers, translating to fewer than 3 million people. Despite this shift, recent trends show borrowers are resuming payments even before they’re due. While some decrease in personal spending is anticipated as more people resume repayments, the total economic effect is projected to be limited.
In other economic news, U.S. construction spending increased by 0.5% in August to $1.984T, equating to a 7.4% increase year-over-year. Private construction reached $1.552T, while public construction spending stood at $431.6B. This growth was boosted by educational construction ($90.6B) and highway construction ($130.4B), according to the U.S. Census Bureau.
Last Updated: 11:30AM EST
Earlier today, the Institute for Supply Management released its monthly report for the ISM Manufacturing Purchasing Managers’ Index, which measures the month-over-month change in production levels. A number over 50 represents an expansion, whereas anything below 50 means a contraction. The report came in at 49, which was higher than the expected 47.7.
Although this indicator is higher than last month’s reading of 47.6, it’s still in an overall decline and has been slowly downtrending ever since its peak in April 2021, when it hit a high of 64.7. Indeed, this is the 11th consecutive month where manufacturing has contracted.
Last Updated: 9:30AM EST
The S&P 500 (SPX) and the Dow Jones Industrial Average (DJIA) were up 0.03% and down 0.2%, respectively, at 9:42 a.m., EST, October 2 after the U.S. avoided a government shutdown after both the House and Senate agreed on a short-term funding bill hours before the deadline. Meanwhile, the tech-heavy Nasdaq 100 soared by 0.48% at the opening bell.
The bill would keep the government open for 45 more days, with the extended period providing lawmakers time to finalize funding legislation. After a painful September, equity investors will hope for something more concrete to materialize from lawmakers by the next deadline of November 17.
The fear of a government shutdown was one of the reasons for a rough September, which saw concerns over higher interest rates weighing on investor sentiment. In particular, September was the worst month of the year for the S&P 500, which declined 4.9%.
Markets are expected to be influenced by key economic releases this week, including September ISM Manufacturing Purchasing Managers’ Index (PMI) and August Construction Spending data on Monday, Job Openings and Labor Turnover Survey (JOLTS) report for August on Tuesday, September ISM Services PMI on Wednesday, and Non-Farm Payrolls and Unemployment rate data on Friday.
Notable earnings to watch this week include consumer staples company Cal-Maine Foods (CALM), alcoholic beverage maker Constellation Brands (STZ), and apparel company Levi Strauss (LEVI).
Meanwhile, Chinese EV makers Nio (NIO), Li Auto (LI), and XPeng (XPEV) reported year-over-year growth in their September deliveries, even as macro uncertainty continues to impact customers. All eyes are on Tesla’s (TSLA) Q3 deliveries, which are anticipated to be announced on Monday.
Elsewhere, European markets moved higher on Monday, backed by signs that inflation is cooling. Data released last week showed that annual inflation in the Euro Zone came down to 4.3% in September from 5.2% in August.
Asia-Pacific Markets on Monday
Chinese markets are closed for the Golden Week holiday and will reopen on Monday, October 9. The Hong Kong Stock Exchange is also closed on Monday, the weekday after National Day. Data released over the weekend showed that China’s PMI inched higher to 50.2 (expansion territory) in September from 49.7 in August, beating consensus expectation of 50.0.
Meanwhile, Japan’s Nikkei and Topix indices declined by 0.31% and 0.39%, respectively, despite the closely watched Tankan survey showing Japanese manufacturers’ rising confidence.
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