Last updated: 4:00PM EST
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Equity markets finished today’s trading session mixed as the Nasdaq 100 (NDX) was little changed, while the S&P 500 (SPX) and the Dow Jones Industrial Average (DJIA) declined by 0.64% and 1.01%, respectively.
Furthermore, the U.S. 10-Year Treasury yield increased to 3.53%, an increase of more than two basis points. Similarly, the Two-Year Treasury yield also increased, as it hovers around 4.07%.
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 2.6% in the second quarter.
This is lower than its previous estimate of 2.7%, which can be attributed to recent releases from the U.S. Bureau of Labor Statistics, the U.S. Census Bureau, the U.S. Department of the Treasury’s Bureau of the Fiscal Service, and the Federal Reserve Board of Governors.
Last updated: 1:30PM EST
Equity markets are mixed so far in today’s trading session. As of 1:30 p.m. EST, the Nasdaq 100 (NDX) was up 0.4%, while the S&P 500 (SPX) and the Dow Jones Industrial Average (DJIA) declined by 0.3% and 0.7%, respectively.
Inflation remains high but is trending in the right direction, according to New York Fed President John Williams. As the U.S. economy balances supply and demand, there’s an expectation for inflation to stabilize. The Federal Reserve has so far increased interest rates by 5% within a year in an effort to curb inflation.
However, the effects of these policy actions take time to permeate the economy. Williams also emphasized the importance of raising the debt ceiling to avoid any unprecedented and potentially detrimental effects on the economy.
Cleveland Fed President Loretta Mester outlined that the prospect of interest rates returning to pre-pandemic lows largely depends on productivity growth. However, the ballooning federal debt poses a significant challenge.
Mester highlighted projections showing the federal debt-to-GDP ratio potentially skyrocketing to 185% by 2052 from 98% in 2022. To mitigate this, a blend of revenue-increasing and cost-reducing policies are essential.
Finally, Michael Barr, the Fed’s vice chair of supervision, suggested stricter regulations for banks with assets exceeding $100 billion, a lesson learned from recent bank failures. He asserted the need for more efficient supervision that evolves with a bank’s growth. In addition, Barr also highlighted the need for improved oversight of incentive compensation for bank managers.
Last updated: 11:11AM EST
Equity markets are mixed so far in today’s trading session. As of 11:11 a.m. EST, the Nasdaq 100 (NDX) was up 0.4%, while the S&P 500 (SPX) and the Dow Jones Industrial Average (DJIA) declined by 0.3% and 0.6%, respectively.
On Tuesday, the National Association of Home Builders released its U.S. NAHB Housing Market Index for March. 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.
Today’s number came in at 50, meaning that sentiment is evenly split. Nevertheless, this print is higher than the 45 that was expected and five points higher than last month’s reading. Indeed, sentiment has now increased for five consecutive months after decreasing every month in 2022.
According to NAHB Chairman Alicia Huey, the main driver behind this jump in sentiment can be attributed to “many homeowners with loans well below current mortgage rates are electing to stay put, and this is keeping the supply of existing homes at a very low level.”
Last updated: 9:36AM EST
The Nasdaq 100 (NDX) was down 0.15%, while the S&P 500 (SPX) and the Dow Jones Industrial Average (DJIA) declined by 0.2% and 0.4%, respectively, at 9:36 a.m. EST, May 16.
The latest round of economic data indicated that the growth in retail sales was less than expected in the month of April. Retail sales increased 0.4% month-over-month in April versus economists’ forecasts of a rise of 0.7% and a decline of 0.7% in March.
However, core retail sales went up by 0.4% month-over-month in April, meeting expectations of a rise of 0.4%.
The industrial production data indicated that after two flat months, industrial output was up by 0.5% in April while economists were expecting a drop of 0.1% for the month.
First published: 5:37AM EST
U.S. Futures are trading mixed this morning as lingering fears over the U.S. Debt ceiling fret the markets. Futures on the Nasdaq 100 (NDX) are up 0.09%, while those on the S&P 500 (SPX) and the Dow Jones Industrial Average (DJIA) are down 0.07% and 0.04%, respectively, at 4:00 a.m. EST, May 16.
Yesterday, the Treasury Secretary, Janet Yellen, once again stressed the urgency of agreeing on raising or suspending the debt ceiling before June 1. Should the U.S. start defaulting on its obligations, there will be immeasurable repercussions, including rising short-term borrowing costs for taxpayers and impacting the country’s credit rating. Meanwhile, the President and Congress leaders are set to meet today to further the agenda on the debt ceiling.
Importantly, this week, traders will monitor speeches by several Federal officials on their stance on future monetary policy. On the other hand, Oil prices have continued to remain subdued so far in 2023 despite OPEC’s production cuts, owing to higher interest rates and a slowing Chinese economy.
On the economic front, April’s retail sales data will be released today at 8:30 a.m. EST, giving a glimpse into consumer behavior. Further, Industrial Production and Manufacturing Output data will be released later in the day.
On the earnings front, home improvement retailer Home Depot (NYSE:HD) will report its first-quarter earnings today. Also reporting first quarter 2023 results today is Chinese tech giant Baidu (NASDAQ:BIDU).
Elsewhere, most European indices were trading in the green following the higher-than-expected three-month unemployment rate of 3.9% in the U.K. The count of total pay-rolled employees fell for the first time in two years by 130,000 in April, citing the possibility of easing inflation in the nation. Meanwhile, the European Commission stated on Monday that it expects euro zone inflation to reach 5.8% in 2023.
Asia-Pacific Markets Mixed on China’s Economic Data
Asia-Pacific indices ended the trading session mixed today, following weaker-than-expected growth in China’s retail sales, industrial production, and fixed asset investment data for April.
Hong Kong’s Hang Seng ended marginally above the flatline, while China’s Shanghai Composite and Shenzhen Component indices ended the trading session down by 0.60% and 0.71%, respectively.
At the same time, Japan’s Nikkei and Topix indices ended the trading session higher by 0.73% and 0.58%, respectively.
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