Last Updated 4:04 PM EST
Stock indices finished today’s trading session in the green. The Dow Jones Industrial Average (DJIA), the S&P 500 (SPX), and the Nasdaq 100 (NDX) gained 0.11%, 0.28%, and 0.77%, respectively.
The energy sector (XLE) was the session’s laggard, as it lost 1.71%. Conversely, the consumer discretionary sector (XLY) was the session’s leader, with a gain of 1.19%. In addition, WTI crude oil fell as it hovers around the mid-$78 per barrel range.
Furthermore, the U.S. 10-Year Treasury yield increased to 3.81%, an increase of more than six basis points. Similarly, the Two-Year Treasury yield also increased, as it hovers around 4.62%.
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 first quarter.
This is higher than its previous estimate of 2.2%, which can be attributed to recent releases from the U.S. Department of the Treasury’s Bureau of the Fiscal Service, the U.S. Bureau of Labor Statistics, the U.S. Census Bureau, and the Federal Reserve Board of Governors
Nevertheless, inflation continues to be a problem around the world. Therefore, it’ll be interesting to see what the actual GDP growth will be and how it’ll change going forward as higher rates start to impact the economy.
Last Updated: 1:35PM EST
Equity markets are mixed so far in today’s trading session. As of 1:35 p.m. EST, the Dow Jones Industrial Average (DJIA) and the S&P 500 (SPX) are down 0.2% and 0.1%, respectively. Alternatively, the Nasdaq 100 (NDX) is up 0.2%.
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 January, industrial production saw no change on a month-over-month basis. This was worse than the 0.5% increase that was expected but an improvement from the previous month’s report of -1%.
When looking at the year-over-year number, it increased by 0.79%. This was lower than last month’s reading of 1.15%. Overall, growth has been trending lower after hitting its peak of 7.51% in February 2022.
Industrial production is clearly slowing down as a result of higher interest rates, which has caused many businesses and consumers to become more cautious.
Last Updated: 11:20AM EST
Equity markets are in the red so far in today’s trading session. As of 11:20 a.m. EST, the Dow Jones Industrial Average (DJIA), the S&P 500 (SPX), and the Nasdaq 100 (NDX) are all down roughly 0.3%.
On Wednesday, the National Association of Home Builders released its U.S. NAHB Housing Market Index for February. The report measures home builder sentiment by surveying around 900 companies. A reading above 50 indicates that more home builders have a positive view of market conditions than a negative one.
The bad news is that today’s number came in at 42, meaning that most have a negative view of the market. However, the good news is that this print is higher than the 37 that was expected and seven points higher than last month’s reading. This equates to the biggest month-over-month jump in a decade. Indeed, sentiment has now increased for two consecutive months after decreasing every month in 2022.
The main driver behind this jump in sentiment has been stabilizing borrowing costs, as economists believe that mortgage rates may have already seen their peak for this economic cycle.
Last Updated: 9:39AM EST
Stocks opened on Wednesday on a sour note as yesterday’s consumer price index (CPI) numbers for January came in higher than expected. The Nasdaq 100 (NDX), S&P 500 (SPX), and Dow Jones Industrial Average (DJIA) are trading down 0.5%, 0.56%, and 0.6%, respectively, as of 9:30 a.m. EST, Wednesday.
However, even in the face of higher inflation and macro pressures, retail sales ticked up by 3% in January, topping consensus forecasts of a 1.7% increase. Excluding automobiles and gas which are two of the most volatile spending categories, retail sales rose by 2.6%, above estimates for a 0.45% increase.
The inflation reading for January came at 0.5% over December, while economists were expecting it to rise by 0.4%. Meanwhile, the core CPI number, excluding food and energy prices, rose by 0.4% last month, versus the expectation of a 0.3% increase. Stocks struggled to find direction in yesterday’s trading session, following the economic data. After a thoroughly volatile trading day, the DJIA and SPX ended the day in the red, while NDX rallied 0.71%.
The CPI figure determines if the prices of goods and services are falling or rising. The higher reading also cemented the Fed’s hawkish stance that interest rates will remain high for a prolonged period.
Today, markets are awaiting the retail sales data, which will determine how consumer demand is behaving in an inflationary environment. Further, the National Association of Home Builders/Wells Fargo Housing Market Index will release February’s homebuilding sentiment numbers later in the day. The components will include current home sales, sales expectations, and buyer traffic.
Notable companies reporting earnings today include Biogen (NASDAQ:BIIB), Kraft Heinz (NASDAQ:KHC), Cisco Systems (NASDAQ:CSCO), and Energy Transfer (NYSE:ET).
European indices remain mixed today, following the higher U.S. CPI number and news of cooling inflation in the U.K. As per the Office for National Statistics, the U.K. inflation figure of 10.1% came in lower than the Reuters economists’ expectation of 10.3%.
Asia-Pacific Markets Bleed on U.S. Inflation Data
Most of the Asia-Pacific market indices are bleeding today following the higher U.S. inflation number.
Hong Kong’s Hang Seng, China’s Shanghai Composite, and Shenzhen Component indices all closed down 1.43%, 0.39%, and 0.01%, respectively.
Also, Japan’s Nikkei and Topix ended the day down 0.37% and 0.27%, respectively.
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