Last updated: 4:04PM EST
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Stock indices finished today’s trading session in the green, as the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) gained 0.03%, 0.16%, and 0.47%, respectively.
The Utilities sector (XLU) was the session’s loser, as it lost 0.32%. Conversely, the Consumer Staples sector (XLP) was the session’s leader, with a gain of 0.77%.
Furthermore, the U.S. 10-Year Treasury yield increased to 4.54%, a gain of eight basis points. Similarly, the Two-Year Treasury yield also jumped, as it hovers around 4.92%.
Meanwhile, a Deutsche Bank’s Thematic Research report published on Wednesday disclosed that investors have predicted a dovish Fed pivot seven times since November 2021. The report noted that the most recent dovish sentiment came on Wednesday following the U.S. CPI data.
According to the research, futures are now pricing in an interest rate drop by the May 2024 meeting. The report noted that investors currently anticipate the Fed to reduce rates following a string of bad data releases. That includes the jobs report showing unemployment at 3.9%, the ISM manufacturing survey at 46.7, and the year-over-year core CPI falling at a two-year low.
However, the drop may not come as projected, given previous instances where inflation had remained too fast for the Fed to cut rates. “With markets pricing a pivot for a seventh time, it’s worth considering whether the conditions are actually in place for that to happen,” the report added. Nonetheless, the research concluded the Fed’s dot plot continues to suggest a more hawkish policy stance in comparison to market pricing.
Last updated: 9:30AM EST
Stocks opened higher on Wednesday morning, with the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) up by 0.31%, 0.37%, and 0.34%, respectively, at the time of writing. Wholesale inflation data, as indicated by the Producer Price Index (PPI), dipped by 0.5% in October, compared with economists’ forecasts of a 0.1% rise. This was the largest month-over-month decline in the PPI since April 2020.
The PPI index gained 1.3% on a year-over-year basis, which was lower than the consensus estimate of a 2% increase. The rise in PPI was lower than the year-over-year increase of 2.2% in September.
Core PPI, which excludes food and energy, remained unchanged month-over-month, again below the consensus forecasts of a 0.3% rise. On a year-over-year basis, core PPI gained by 2.4% versus the 2.7% jump expected by economists.
Even retail sales slowed down in October, declining by 0.1% month-over-month to $705 billion. This was a sharp deceleration from the 0.9% increase in sales seen in September. Economists were expecting retail sales to fall by 0.3% in October. Meanwhile, core retail sales gained by 0.1%, topping the consensus estimates of a 0.2% decline but slowing down from a 0.8% jump in the prior month.
In addition, Mortgage applications rose by 2.8%, which was the largest gain in the past five weeks for the week ending November 10, according to the Mortgage Bankers Association’s (MBA) seasonally adjusted index. The index gained for the second straight week.
The average interest rate for 30-year fixed-rate mortgages remained unchanged at 7.61%. The MBA’s vice president and deputy chief economist, Joel Kan, commented, “Although Treasury rates dipped midweek, mortgage rates were little changed on average through the week.”
First published:4:27AM EST
U.S. Futures are climbing higher on Wednesday, continuing the optimism from yesterday’s CPI reading. Futures on the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) are up by 0.42%, 0.31%, and 0.24%, respectively, at 4:22 a.m. EST, November 15.
Traders rejoiced the flat month-over-month inflation reading for October, pushing stocks higher in regular trade on November 14. The cooling inflation print means the Federal Reserve could stick to the pause in the rate hike cycle going forward. Further, the U.S. government’s efforts to avert a shutdown come Friday, November 17, were also appreciated by market participants.
Remarkably, the U.S. 10-year treasury yield fell sharply yesterday and is floating near 4.46% at the time of writing. And the WTI crude oil futures are hovering near $78.32 per barrel as of the last check. Meanwhile, traders anticipate quarterly results from Target (TGT), JD.com (JD), TJX Companies (TJX), Cisco (CSCO), Palo Alto (PANW), and XPeng (XPEV) among others today.
On the economic front, the Producer Price Index (PPI) data for October will be released today along with Retail Sales. Experts predict wholesale inflation to have grown by 0.1% in October and 1.9% on an annualized basis.
Remarkably, a slew of hedge funds released their holdings for the quarter ending September 30 in 13F filings yesterday, disclosing interesting additions/deletions to their portfolio. Activist investor Nelson Peltz’s Trian Fund took new stakes in insurer Allstate (ALL) and food distributor Sysco (SYY). At the same time, the hedge fund increased its stake in entertainment giant Walt Disney (DIS). Also, Warren Buffett’s Berkshire Hathaway (BRK.A)(BRK.B) disclosed that it has divested holdings in Johnson & Johnson (JNJ) and UPS (UPS), among others, in Q3.
Further, Bill Ackman’s Pershing Square increased its stake in Alphabet (GOOGL) while reducing exposure to Lowe’s (LOW). In other news, a U.S. Federal court ruled yesterday that social media companies, namely Meta Platforms (META), Alphabet (GOOGL), SNAP (SNAP), and Chinese company ByteDance, cannot claim blanket protection under the First Amendment Act or Section 230. The rejection means that these social media platforms will fight courtroom battles alleging child addiction and health impacts.
Elsewhere, European indices are trading higher today following the enthusiasm in global markets. Also, inflation in the U.K. slowed to 4.6% in October from 6.7% in September. This is the lowest inflation reading in the last two years.
Asia-Pacific Markets End Higher on Wednesday
Asia-Pacific indices ended in the green today, following their U.S. counterparts. Also, robust retail sales data and industrial production figures from China helped boost the markets.
Hong Kong’s Hang Seng index and China’s Shanghai Composite and Shenzhen Component indexes ended up by 3.92%, 0.55% and 0.71%, respectively.
Similarly, Japan’s Nikkei and Topix indices finished higher by 2.52% and 1.19%, respectively.
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