Stock Market Today – Stocks Close Higher despite Rising Treasury Yields

Last Updated 4:00 PM EST

Stock indices finished Today’s trading session in the green. The Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 gained 2.58%, 2.46%, and 3.17%, respectively.

The consumer discretionary sector was the session’s laggard (XLY), as it gained 0.1%. Conversely, the technology sector (XLK) was the session’s leader, with a gain of 4.35%. In addition, WTI crude oil remained below $90 per barrel as it hovers around the low-$88 range.

Furthermore, the U.S. 10-Year Treasury yield increased to 4%, an increase of more than eight basis points. Similarly, the Three-Month Treasury yield also increased, as it hovers around 4.09%.

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. The initial fourth-quarter estimate calls for growth of 3.1%.

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.

Stock Rally Accelerates; Pending Home Sales Fall 10.2%

Last Updated 3:00PM EST

Stocks are in the green heading into the final hour of today’s trading session. As of 3:00 p.m. EST, the Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 are up 2.5%, 2.4%, and 3.1%, respectively.

The National Association of Realtors released its Pending Home Sales report, which measures the month-over-month change in the number of home sales that have yet to close but are contracted to be sold. This measure excludes homes that are newly constructed.

During September, Pending Home Sales fell by -10.2% compared to August, which was much worse than the expected -5% decline. This is on top of a -1.9% decline in the previous report. Of the 10 reports issued in 2022, only one of them saw an increase.

In addition, the Pending Home Sales Index came in at 79.5, which is lower than the 116.5 reading from the same time last year. This equates to an approximate decline of 31.8% on a year-over-year basis.

As a result, the overall trend in sales is downwards, as the cost of borrowing continues to increase and more houses hit the market. This has also caused houses to sit for longer periods of time on the market because there are fewer buyers who now have more options to choose from.

Stocks Rally; Personal Spending Exceeds Expectations

Last Updated 11:54AM EST

Stocks are in the green halfway into today’s trading session. As of 11:54 p.m. EST, the Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 are up 2%, 1.7%, and 2.1%, respectively.

On Friday, the U.S. Department of Commerce released its Real Personal Consumption report. This data measures the change in personal consumption for goods and services on a month-over-month basis, adjusted for inflation. Real Personal Consumption increased by 0.3% in September compared to a 0.3% increase in the previous month.

Similarly, the Bureau of Economic Analysis (BEA) released its Personal Spending report, which measures the inflation-adjusted change in all spending by consumers. This number increased by 0.6% month-over-month compared to the expected 0.4%.

In addition, the BEA also released data on the change in personal income, which was an increase of 0.4% versus expectations of 0.3%.

Together, these numbers suggest that consumer demand is still strong, which is likely to continue keeping inflation elevated. It’s also worth noting that consumers appear to be increasing their spending faster than their income is growing.

Stocks Rally as Month-over-Month Core PCE Meets Expectations

Last Updated 10:00AM EST

Stock Indices are in the green to start today’s trading session. As of 10:00 a.m. EST, the Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 are up 1.2%, 0.7%, and 0.8%, respectively.

On Friday, the Bureau of Economic Analysis released its Core Personal Consumption Expenditure (PCE) Price Index for the month of September. Since this is the Fed’s preferred measure of inflation, it tends to have more influence over Jerome Powell’s decisions than the CPI does.

On a month-over-month basis, core PCE growth came in at 0.5%, which was in line with expectations and the same as the previous month’s report. Unfortunately, this is still considered too high and doesn’t appear to be slowing down.

On a year-over-year basis, core PCE increased by 5.1%, which was slightly lower than the expected 5.2% but still higher than last month’s reading of 4.9%.

Nevertheless, core PCE doesn’t include food and energy prices. When including these two items, year-over-year PCE came in at 6.2%, which was equal to the last report. However, regular PCE was slightly better on a month-over-month basis than core PCE, coming in at 0.3%.

Futures Down as Tech Rout Deepens

First Published 7:01AM EST

Stock futures moved lower early Friday morning as investors digested yet another dismal big-tech earnings report from Amazon (NASDAQ:AMZN).

Futures on the Dow Jones Industrial Average (DJIA) lost 0.12%, while those on the S&P 500 (SPX) lost 0.61%, as of 6.45 a.m. EST Friday. Meanwhile, the Nasdaq 100 (NDX) futures retracted 1.04%.

The Tech Bloodbath

On Thursday, the tech-heavy Nasdaq 100 ended the regular trading session 1.88% lower as tech stocks retreated on an uncertain sooner future. Amazon reported lower-than-expected quarterly performance and provided downbeat guidance for the fourth quarter after the market closed Thursday. Shares plummeted 13% in the pre-market hours of Friday after closing 4% lower on Thursday.

Meanwhile, Meta (NASDAQ:META) nosedived 25% at the end of regular trading on Thursday after posting disappointing revenues and a weak outlook. Most of all, the company’s growing investments in the metaverse (a bet that is not yet proven to be life-changing), especially at a challenging time for tech companies depending on digital advertising revenues, did not sit well with investors.

On the other hand, Apple (NASDAQ:AAPL) reported dismal iPhone sales despite an earnings and revenue beat.

Coming to the other indexes, the S&P 500 closed Thursday with a loss of 0.6%, whereas the Dow clocked its fifth consecutive session in the green with 0.6% gains.

The gains in the Dow were a result of the upbeat third-quarter GDP (gross domestic product) reading. The Dow and S&P are on track to end the week around 3% and 1.5% higher, respectively. The Nasdaq 100, on the other hand, might settle in the red.

Economic Growth May be Temporary

The third-quarter GDP report showed a 2.6% economic growth after two straight quarters of negative growth. Trade was the primary growth catalyst as the U.S. exported more than usual oil and natural gas to Europe as the latter faces a crunch due to the ongoing Russia-Ukraine war.

Now, as the U.S. battles inflation, diesel crunch, supply-chain disruptions, and recession ahead of the midterm elections, restrictions on U.S. oil exports to Europe in a move to address issues back home may be on the cards soon. Therefore, as trade falls back to normal levels (or below), economic growth might be hampered once again.

However, the data also hinted at a slowdown as business spending was lower due to inflation and higher interest rates. This watered down some of the excitement in the market.

Meanwhile, U.S. housing mortgage rates surpassed 7% for the first time in two decades, revealing the starkness of the housing crisis.

On the economic data front, traders are awaiting the Personal Consumption Expenditures Price Index, one of the Federal Reserve’s preferred measures of inflation. Moreover, consumer sentiment data and pending home sales data are also due on Friday.

Disclosure