Last updated: 4:00 PM EST
Stock indices finished today’s trading session in the green as traders become optimistic that an agreement over the debt ceiling will be reached. As a result, the Dow Jones Industrial Average (DJIA), the S&P 500 (SPX), and the Nasdaq 100 (NDX) gained 1.24%, 1.19%, and 1.22%, respectively.
Furthermore, the U.S. 10-Year Treasury yield is on the rise, hitting 3.58% – a jump of over three basis points. Not to be left out, the Two-Year Treasury yield also nudged higher and now hovers around 4.15%.
Meanwhile, the Atlanta Federal Reserve has given its latest GDPNow reading a refresh, offering a “real-time” estimate of GDP growth. As more economic data trickles in throughout the quarter, this “nowcast” sharpens in accuracy. As of now, it pegs the economy’s second-quarter expansion at about 2.9%. That’s an increase from its earlier 2.6% estimate, a tweak brought on by the latest housing starts report from the U.S. Census Bureau.
Nevertheless, inflation remains a global concern that’s still very much in the picture. So, we’re left to wonder what the actual GDP growth will turn out to be and how it might shape-shift as the impact of climbing rates starts to resonate throughout the economy.
Last updated: 1:57 PM EST
Stock indices are in the green so far in today’s trading session. As of 1:57 p.m. EST, the Dow Jones Industrial Average (DJIA), the S&P 500 (SPX), and the Nasdaq 100 (NDX) are all up roughly 1.3%.
President Biden and House Speaker Kevin McCarthy have collectively voiced their determination to prevent a default on U.S. debt following a productive meeting to discuss the debt ceiling. Both leaders are leaning on senior advisers to carve out an agreement, with a mutual understanding of the potential catastrophe for the American economy if the U.S. fails to meet its obligations.
The timeline is tight, with only two weeks until the government is projected to exhaust its payment avenues. However, McCarthy expressed confidence in the established structure for finding a resolution, despite differences between the two sides.
One point of contention is work requirements for federal assistance – while McCarthy is advocating for these to apply to able-bodied individuals with no dependents, Biden has stated he won’t accept any work requirements that would impact people with medical issues.
Another disagreement lies in the consideration of revenue-increasing measures as part of the debt ceiling discussion, which McCarthy has rejected.
Last updated: 9:30AM EST
The Nasdaq 100 (NDX) was up by 0.3% while the S&P 500 (SPX) and the Dow Jones Industrial Average (DJIA) rose by 0.5% each at 9:30 a.m. EST, May 17, as hopes rose of a deal on the debt ceiling.
A fresh round of Q1 earnings from major retailers proved to be a mixed bag.
Another round of economic data was out today. Mortgage demand has been hit with a shortage of homes up for sale and higher mortgage rates keeping buyers at bay. Data from the Mortgage Bankers Association’s seasonally adjusted index for the week ending May 12 indicated that mortgage applications fell to 4.8% last week. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) went up to 6.57% from 6.48%, while applications to refinance a home loan also dropped by 8% last week.
The severe shortage of homes is spurring the construction of new homes, which increased by 2.2% in April. Housing starts increased to a 1.4 million annual pace last month from 1.37 million in March, roughly matching economists’ forecasts.
First published: 4:35AM EST
U.S. Futures are trending higher this morning as traders focus on the progress of the U.S. Debt ceiling negotiations and digest the weaker-than-expected retail sales data. No one knows the outcome of the discussions between President Biden and the Congressional leaders on the debt ceiling. Nevertheless, Futures on the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) were up 0.03%, 0.07%, and 0.08%, respectively, at 3:30 a.m. EST, May 17.
Meanwhile, on the economic front, April’s retail sales increased a modest 0.4% month-over-month, while economists had expected a growth of 0.7%. At the same time, home improvement retailer Home Depot (NYSE:HD) missed earnings estimates and also slashed the sales outlook for Fiscal 2023.
Similarly, oil stocks continue to face pressure as oil prices have dropped over 40% from the all-time highs touched last year, and wells are sitting idle while Wall Street pushes for higher payouts to shareholders.
These data sets point to weakening consumer sentiment and give a clue to where the economy is heading. Additionally, data on Housing Starts and Building Permits will be released today.
On the earnings front, investors will keep an eye out for the quarterly results from merchandise retailer Target (NYSE:TGT) and off-price retailer TJX Companies (NYSE:TJX), both reporting today before the bell.
Elsewhere, European indices were trading in the red today following concerns over U.S. Debt ceiling negotiations. A series of earnings results from corporates also impacted the markets as traders gave more weight to the trimming forecasts given by companies.
Asia-Pacific Markets End Mixed
Asia-Pacific indices ended the trading session mixed today as traders focused on the outcome of the U.S. debt ceiling negotiations. Also, China’s property sector witnessed further declines, as data showed that new home prices fell 0.2% year-over-year.
Hong Kong’s Hang Seng, China’s Shanghai Composite, and Shenzhen Component indices ended the trading session down by 2.11%, 0.21%, and 0.07%, respectively.
At the same time, Japan’s Nikkei and Topix indices bucked the trend and ended the trading session higher by 0.84% and 0.30%, respectively.
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