Last Updated 4:05 PM EST
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Stock indices finished today’s trading session in the red as recession fears continue to weigh on investor sentiment. The S&P 500 and the Nasdaq 100 lost 0.19% and 0.45%, respectively. On the other hand, The Dow Jones Industrial Average closed flat.
The consumer discretionary sector was the session’s laggard, as it lost 0.61%. Conversely, the healthcare sector was the session’s leader, with a gain of 0.84%.
Furthermore, the U.S. 10-Year Treasury yield decreased to 3.41%, a decrease of more than 11 basis points. Similarly, the Two-Year Treasury yield also decreased, as it hovers around 4.26%. This brings the spread between them to -85 basis points.
Compared to yesterday, the market is pricing in a higher chance of a lower Fed Funds rate for June 2023. In fact, the market’s expectations for a rate in the range of 5% to 5.25% decreased to 33.8% compared to yesterday’s expectations of 38.3%.
In addition, the market is now also assigning a 37.4% probability to a range of 4.75% to 5%. For reference, investors had assigned a 33.6% chance yesterday.
Stocks are Down; Gasoline Prices Continue to Decline
Last Updated at 2:30PM EST
Stocks are in the red heading into the final 90 minutes of today’s trading session. As of 2:30 p.m. EST, the S&P 500 and the Nasdaq 100 are down 0.2% and 0.4%, respectively.
In addition, WTI crude oil is lower today, as it hovers around the low-$72 per barrel range. The commodity’s overall downtrend has caused prices at the pump to decline when compared to last week.
Indeed, the national average for regular gas was last $3.355 per gallon, down from yesterday’s reading of $3.38. This is significantly lower than the all-time high of $5.016 per gallon on June 14.
The highest prices can be found in Hawaii, where prices are substantially higher than the national average, at $5.177 per gallon. On the other hand, Texas is the state with the lowest gas prices, at $2.777 per gallon.
It’ll be interesting to see if this downward trend will continue going forward as the Federal Reserve looks to raise interest rates to fight inflation while oil producers lower production in order to maintain the price.
Major Indices are Down; Mortgage Applications Decrease
Last Updated 11:30AM EST
Stocks are in the red despite briefly turning positive. As of 11:30 a.m. EST, the Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 are down 0.2%, 0.3%, and 0.8%, respectively.
On Wednesday, the Mortgage Bankers Association released its weekly report for the U.S. 30-Year mortgage rate. The mortgage rate decreased to 6.41% compared to last week’s reading of 6.49%.
Nevertheless, the number of mortgage applications decreased week-over-week by -1.9%, following last week’s decrease of -0.8%. This indicates that sentiment in the real estate market is falling, which is consistent with other data that has been released so far.
In addition, mortgage application volume is down substantially on a year-over-year basis, with the Mortgage Market Index at 204.2 compared to 616.4 on December 8, 2021.
Markets Fall at Open
Last updated 9:48AM EST
Recession fears continued to weigh on investors’ minds as markets opened lower on Wednesday.
The Dow Jones Industrial Average (DJIA) dipped 0.03%, while the S&P 500 (SPX) was down 0.07%, as of 9.48a.m. EST, Wednesday. Meanwhile, the Nasdaq 100 (NDX) retracted 0.5%.
Last updated 8:47AM EST
U.S. stock futures continued to fall on Wednesday morning as fears of a recession took hold on the possibility that the Fed could continue to raise interest rates for longer than expected.
Futures on the Dow Jones Industrial Average (DJIA) slipped 0.2%, while those on the S&P 500 (SPX) dropped 0.4%, as of 8.47a.m. EST, Wednesday. Meanwhile, the Nasdaq 100 (NDX) futures retracted 0.65%.
Last updated 6:46AM EST
U.S. stock futures dipped early Wednesday morning on fears of a hard landing next year after major companies’ CEOs express concerns about a recession in 2023.
Futures on the Dow Jones Industrial Average (DJIA) lost 0.14%, while those on the S&P 500 (SPX) lost 0.25%, as of 6.32 a.m. EST, Wednesday. Meanwhile, the Nasdaq 100 (NDX) futures retracted 0.37%.
On Tuesday, the market indexes ended the regular trading session with losses. The S&P 500, the Dow, and the Nasdaq 100 were down 1.44%, 1.03%, and 2.01%, respectively.
CEOs Read the Economic Tea Leaves, and They Are Bitter
CEOs of some of the major players of different sectors expressed their growing concerns and expectations of a recession in the near future. JPMorgan (NYSE:JPM) CEO Jamie Dimon thinks that the government aid provided during COVID-19 is what is keeping up the strong consumer spending. However, once that runs dry and wallets get lighter due to inflation and high borrowing rates, a true recession will emerge.
Again, General Motors (NYSE:GM) CEO Mary Barra anticipates more challenges next year, especially stemming from a demand collapse. Moreover, Walmart (NYSE:WMT) CEO Doug McMillon is bracing for a possible recession, which he thinks might be necessary to bring down inflation to desirable levels.
Meanwhile, Union Pacific Railroads (NYSE:UNP) CEO Lance Fritz is seeing shipping tapering off as the economy tightens, which might potentially trigger a recession in 2023. In the travel scene, United Airlines (NYSE:UAL) CEO Scott Kirby is seeing a plateauing in travel demand, which can be seen as “pre-recessionary behavior.”
Based on these observations by industry leaders, combined with the strong labor force, investors are concerned whether the December FOMC meeting will bring another 75 basis-point interest rate hike despite Fed Chair Jerome Powell indicating a softer hike.
On the economic front, data on mortgage loan applications for the last week will be reported on Wednesday. The data will give investors more insights into how many homes Americans have been buying this past week.
