Last updated: 4:01PM EST
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Stock indices finished today’s trading session mixed. Indeed, the Dow Jones Industrial Average (DJIA) gained 0.12%, while the S&P 500 (SPX) and Nasdaq 100 (NDX) fell 0.5% and 1.24%, respectively. Earlier today, Patrick Harker, Philadelphia Federal Reserve President, and analysts from UBS expressed cautious optimism about the U.S. economy and financial markets while emphasizing different aspects on Friday.
Harker, addressing the Delaware State Chamber of Commerce, suggested that the Federal Reserve might pause further interest rate hikes, with 11 adjustments already made since March 2022. He anticipates a gradual decrease in inflation to 2% post-2023 and does not foresee a recession in his outlook, mirroring sentiments from other Fed officials like Boston Fed President Susan M. Collins.
Meanwhile, UBS analysts predict a “softish” landing for the U.S. economy with several factors like the recommencement of student loan payments along with higher oil prices and mortgage rates potentially dampening consumer spending.
Although UBS sees potential growth in S&P 500 profits, expectations are tempered, with its June 2024 S&P 500 price target being adjusted down to 4,500 from 4,700. This highlights a cautious stance amid geopolitical and domestic financial developments.
Last updated: 12:00PM EST
Stock indices are down so far in today’s session. On Friday, the University of Michigan released its preliminary results on consumer inflation expectations over the next five years. Consumers now expect inflation to be 3%, which was higher than the expected 2.8% and increased compared to the previous month.
Taking a look at consumer sentiment, results came in at 63, which was lower than the expected 67.2. This is also a decrease compared to last month’s reading of 68.1. In addition, consumer expectations came in lower than expected. October saw a print of 60.7 versus the forecast of 65.5. This was also a decrease compared to last month’s result of 66.
Last updated: 9:30AM EST
Stocks opened higher on Friday morning, with the Nasdaq 100 (NDX) up by 0.17%, while the S&P 500 (SPX) and the Dow Jones Industrial Average (DJIA) are up by 0.5% and 0.6%, respectively, at 9:30 a.m. EST, October 13. Major banks announced their earnings today and, overall, exhibited a strong Q3 performance.
Meanwhile, the import data indicated that the U.S. import price index climbed by 0.1% in September – its third straight rise. This increase was less than economists’ forecasts of a gain of 0.5%. Excluding fuel, import prices declined by 0.2% for the second straight month.
First published: 4:45AM EST
U.S. Futures are shaky in the wee hours of Friday morning. Markets look forward to the third-quarter earnings releases from America’s largest banks. Futures on the Nasdaq 100 (NDX) are down by 0.03%, while those on the S&P 500 (SPX) and the Dow Jones Industrial Average (DJIA) are up by 0.12% and 0.20%, respectively, at 4:45 a.m. EST, October 13.
Importantly, the three major averages finished yesterday’s trading session in the red following the hotter-than-expected Consumer Price Index (CPI) print. Even so, the three indices are slated to finish the trading week on a positive footing. Inflation grew 0.4% in September and 3.7% on an annualized basis, both exceeding projections. The hot inflation data pushed treasury yields higher and added to the possibility of further interest rate hikes.
Notably, the U.S. 10-year treasury yield is up, floating near 4.66% at the time of writing. Further, the intensified Israel-Hamas war is making investors fear the oil supply and related hikes in oil prices. WTI crude oil futures are hovering near $83.73 per barrel as of the last check. Moreover, traders anticipate the preliminary data on Michigan Consumer Sentiment for October later today.
Turning to important stock news, the UK antitrust regulators approved the long-pending Microsoft (MSFT)-Activision Blizzard (ATVI) takeover. This puts to rest all the allegations of the monopolistic nature of the deal, and MSFT can finally complete the merger with the gaming giant. Also, gene sequencing company Illumina (ILMN) received a decree from European Union (EU) antitrust regulators to divest the cancer detection company Grail. European regulators have mandated the maintenance of Grail as a distinct entity until a suitable divestiture or sale strategy is determined.
Furthermore, Qualcomm (QCOM) is facing challenges due to the continued slowdown in the Chinese market and macroeconomic headwinds, affecting the demand for its handset business. Accordingly, the chipmaker has decided to cut 1,258 jobs in San Diego and Santa Clara, California, as per a Bloomberg report.
Elsewhere, European indices are trading in the red on Friday morning following the persistent CPI data from the U.S. and the brutality of the Israel-Hamas war.
Asia-Pacific Markets End Lower on Friday
Asia-Pacific indices ended lower on Friday following dismal economic data from China. The mainland’s CPI data was flat in September, while the PPI index declined 2.5% on an annualized basis. Traders also reacted to the hot inflation data coming from the U.S. and fretted over the ongoing war and tensions in the Middle East.
Hong Kong’s Hang Seng index and China’s Shanghai Composite and Shenzhen Component indices finished down by 2.33%, 0.64%, and 0.99%, respectively.
Similarly, Japan’s Nikkei and Topix indices ended down by 0.55% and 1.44%, respectively.
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