Last Updated 4:05 PM EST
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Stock indices finished today’s trading session in the red amid a slew of economic data (see previous updates). Indeed, the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) fell 1.07%, 0.76%, and 0.52%, respectively. The consumer discretionary sector (XLY) was the session’s laggard, as it lost 1.24%. Conversely, the utilities sector (XLU) was the session’s leader, with a gain of 0.44%.
Furthermore, the U.S. 10-Year Treasury yield increased to 4.27%, an increase of five basis points. Similarly, the Two-Year Treasury yield also increased, as it hovers around 4.98%.
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 5.8% in the third quarter.
This is higher than its previous estimate of 5%, which can be attributed to this morning’s housing starts report from the U.S. Census Bureau and industrial production report from the Federal Reserve Board of Governors.
Last updated: 2:30PM EST
The Federal Reserve released its meeting minutes, which indicated that the central bank is still concerned about inflation. Furthermore, Wells Fargo analysts dropped a warning on Wednesday, stating that we might be heading toward an economic slowdown. They’re predicting a recession to kick in by early 2024, putting a damper on the more optimistic “soft landing” scenario that’s been buzzing around the market lately.
While the S&P 500 is currently trading around the $4,440 mark, Wells Fargo is expecting it to take a dip, ending up somewhere between the 4,000–4,200 range by the end of 2023. If the economic chill does set in as they’re forecasting, equity earnings and prices could feel the pressure, leading to some market instability.
Last updated: 12:30PM EST
Stock indices are in the red so far in today’s trading session. Earlier today, the Federal Reserve released its U.S. Industrial Production report, which measures the change in the total value of output produced by manufacturers, utilities, and mines. These figures are adjusted for inflation.
For July, industrial production increased by 1% on a month-over-month basis. This was better than the 0.3% that was expected and better than the previous month’s report of -0.8%.
However, when looking at the year-over-year number, it decreased by -0.23%. This was higher than last month’s reading of a -0.78% decrease. Overall, growth has been trending lower since hitting 7.51% in February 2022.
Last updated: 9:30AM EST
Stocks opened mixed on Wednesday, with the Nasdaq 100 (NDX), and S&P 500 (SPX) down by 0.5%, and 0.12%, while the Dow Jones Industrial Average (DJIA) was up by 0.07%, respectively, at 9:30 a.m., EST, August 16. The calendar second-quarter earnings from major retailers like Target (TGT) and TJX Companies (TJX) came in better than expected.
Meanwhile, housing and mortgage applications data came in on Wednesday and while the housing market continued to be strong in July, mortgage applications fell in the week ending August 11. The composite mortgage applications index declined by 0.8% as compared to a fall of 3.1% a week back. The purchase index declined by 0.3% in the week ending August 11 as compared to a drop of 2.7% in the prior week.
However, mortgage rates continue to rise for the third week in a row to their highest level since October of last year, with a 30-year fixed mortgage at 7.16%.
July housing starts were up by 3.9% month-over-month in July to 1.45 million as compared to estimates of 1.455 million. On a year-over-year basis, housing starts increased by the same percentage (3.9%). Building permits increased by 0.1% month-over-month to 1.442 million as compared to economists’ forecasts of 1.464 million.
First published: 4:31AM EST
U.S. Futures are inching higher on Wednesday morning, following a negative close to the major averages on Tuesday. Markets are reeling from the news of Fitch’s warning about downgrading bank stocks. The news follows last week’s downgrade of 10 banks by the other credit rating agency, Moody’s. Futures on the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) are up by 0.27%, 0.19%, and 0.17%, respectively, at 4:00 a.m., EST, August 16.
Traders are also assessing the earnings from big American retail companies after retail sales figures came in stronger. Remarkably, July retail sales rose 0.7% over the previous month, while core retail sales rose by 1% versus the Street’s expectations of a 0.3% decline. Importantly, the minutes from July’s FOMC meeting will be released at 6:00 p.m., EST today. Traders will be glued to the screen to get any clues about the future pathway for monetary policy and the overall health of the U.S. economy. Notably, the WTI crude oil price is inching lower today, hovering near $80.87 per barrel as of the last check.
Meanwhile, big box retailer Target (TGT) is scheduled to release its Q2FY23 results today, before the market opens. Analysts expect macro pressures to weigh on the retailer’s top line, given that it has more exposure to discretionary items than many peers. Also, reporting today are TJX Companies (TJX), Cisco (CSCO), and JD.com (JD), among others.
There are also reports circulating that semiconductor player Intel (INTC) could scrap its proposed acquisition of Tower Semiconductor (TSEM) since it is unlikely to receive Chinese regulatory approval in time. In the meantime, Vietnamese EV maker VinFast Auto (VFS) closed 68.45% higher on its stock market debut, outpacing the market caps of legacy automakers General Motors (GM) and Ford Motor Company (F). Also, tax reporter H&R Block (HRB) jumped in extended trading following robust Q4FY23 results.
On the economic front, MBA Mortgage Applications, Housing Starts, and Industrial Production reports are due for release today.
Elsewhere, European indices are trading mixed on Wednesday. The U.K.’s headline inflation print fell sharply to 6.8% in July from a 7.9% figure recorded in June. On the other hand, the core CPI print came in slightly higher than expected at 6.9%, the same as June’s figure. Traders are also anticipating the euro zone’s Q2 GDP reading and Britain’s house price index due later today.
Asia-Pacific Markets ended in the Red
The Asia-Pacific indices finished in the red on Wednesday, following their U.S. counterparts. China’s house price index fell 0.1% year-over-year in July. At the same time, Japan’s business sentiment showed signs of improvement in July.
Hong Kong’s Hang Seng index and China’s Shanghai Composite and Shenzhen Component indices ended lower by 1.36%, 0.82%, and 0.94%, respectively.
Similarly, Japan’s Nikkei and Topix indices finished lower by 1.46% and 1.29%, respectively.
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