Last updated: 4:09PM EST
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Stock indices finished today’s trading session in the green, as the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) gained 2.13%, 1.91%, and 1.43%, respectively.
The Health Care sector (XLV) was the session’s laggard, as it gained 0.68%. Conversely, the Real Estate sector (XLRE) was the session’s leader, with a gain of 5.4%.
Furthermore, the U.S. 10-Year Treasury yield saw a sharp decrease to 4.46%. Similarly, the Two-Year Treasury yield also plunged, as it hovers around 4.83%.
Earlier today, Federal Reserve Vice Chair for Supervision Michael Barr told the Senate Banking Committee in a testimony that the U.S. banking system is “sound and resilient.”
Barr remarked that the acute stress observed in the banking sector earlier in the year has eased. He added that banks continue to report capital and liquidity ratios higher than minimum regulatory levels. “Earnings performance has remained solid and in line with pre-pandemic levels, despite recent pressure on net interest margins,” Barr said.
Furthermore, the Federal Reserve executive reiterated some of the Central Bank’s recent regulatory proposals. Of note, Barr mentioned proposals for changes to the capital requirement framework and the possibility of extending long-term debt requirements to more banks.
According to Barr, the collapse of Silicon Valley Bank was caused by mismanagement of interest-rate risk, as well as operations such as the elimination of certain hedges. He added that the subsequent contagion indicates that the banking system needs more capital and liquidity.
Meanwhile, Chicago Fed President Austan Goolsbee said on Tuesday that the U.S. may be able to accomplish the highest peacetime decrease in inflation ever. Goolsbee made these statements at an event sponsored by the Detroit Economic Club, where he noted that such a feat would surpass the 4 percentage-point drop seen in 1982.
Furthermore, Goolsbee said inflation has benefited from the unwinding of supply chain disruptions and good productivity growth. However, the Fed executive noted that there is still a disconnect between the data and people’s perceptions of the U.S. economy despite the declining inflation rate.
Last updated: 9:30AM EST
Stocks opened higher on Tuesday morning after the CPI data, with the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) up by 1.79%, 1.45%, and 1.1%, respectively, at 9:30 a.m. EST, November 14.
Meanwhile, economists at UBS expect the Federal Reserve to slash interest rates by around 275 basis points in 2024. Economists at UBS stated that
In its 2024-2026 outlook for the U.S. economy, UBS has warned of persistent challenges despite resilience in 2023. The bank predicts disinflation and increased unemployment to weaken economic output next year and anticipates Federal Reserve rate cuts in 2024 to counter economic decline.
Last updated: 8:30AM EST
U.S. stock futures inched higher after the Consumer Price Index (CPI) remained unchanged in October on a seasonally adjusted basis. Futures on the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) are up by 1.69%, 1.42%, and 1.09%, respectively, at 8:30 a.m. EST, November 14.
The CPI index remained unchanged in October after rising by 0.4% in September, while economists were expecting the CPI to increase by 0.1%. On a year-over-year basis, the all-items index was up by 3.2% before seasonal adjustment, below consensus estimates of 3.3%.
The housing continued to rise in October while the energy index dropped by 2.5% over the month. The drop in the energy index was led by a 5% decline in gasoline prices. The food index continued to rise and went up by 0.3% in October after increasing by 0.2% in September.
The core CPI (excluding food and energy prices) rose by 0.2% in October, which was at a slower pace than an increase of 0.3% in September and again below forecasts of an increase of 0.3%. On a yearly basis, core CPI went up by 4% – its smallest rise since September 2021, while economists had expected it to be up by 4.1%.
First published:3:15AM EST
U.S. Futures are inching higher on Tuesday morning as investors anticipate October’s inflation data. Futures on the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) are up by 0.23%, 0.14%, and 0.03%, respectively, at 3:00 a.m. EST, November 14.
The Consumer Price Index (CPI) data is due for release this morning, with expectations pegged at a 0.1% month-over-month increase. On an annualized basis, CPI is expected to have risen by 3.3%. At the same time, core CPI (excluding food and gas) figures are pegged at a 0.3% increase in October and 4.1% for the twelve months. A hotter-than-expected report could trigger the Federal Reserve to reconsider its interest rate stance.
Meanwhile, the U.S. 10-year treasury yield is floating near 4.62% at the time of writing. And the WTI crude oil futures are hovering near $78.42 per barrel as of the last check. Investors also await quarterly results from home improvement retailer Home Depot (HD) before the bell today.
Remarkably, energy giant Exxon Mobil (XOM) announced yesterday that it is aiming to become a large supplier of lithium, which is a crucial component in EV (Electric Vehicle) batteries. Also, aircraft manufacturer Boeing (BA) gained yesterday after Emirates Airlines confirmed an order for 95 Boeing aircraft worth $52 billion at the Dubai Airshow. Further, China is considering ending its freeze on Boeing when the country’s President Xi Jinping meets U.S. President Joe Biden this week at the APEC summit, pushing the shares higher.
Elsewhere, European indices are trading mixed today as traders await the Eurozone’s preliminary gross domestic product (GDP) data for the third quarter.
Asia-Pacific Markets Mostly End Higher on Tuesday
A majority of Asia-Pacific indices ended in the green today as markets look forward to U.S. President Joe Biden and China’s President Xi Jinping’s meeting in San Francisco today.
Hong Kong’s Hang Seng index ended lower by 0.09%, while China’s Shanghai Composite and Shenzhen Component indexes ended up by 0.31% and 0.17%, respectively.
Similarly, Japan’s Nikkei and Topix indices finished higher by 0.34% and 0.37%, respectively.
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