Last Updated 4:05 PM EST
Stock indices finished today’s trading session in the green as investors hope the debt ceiling issues will be solved. The Dow Jones Industrial Average (DJIA), the S&P 500 (SPX), and the Nasdaq 100 (NDX) gained 0.34%, 0.94%, and 1.81%, respectively.
The real estate sector (XLRE) was the session’s laggard, as it fell 0.66%. Conversely, the technology sector (XLK) was the session’s leader, with a gain of 2.05%.
Furthermore, the U.S. 10-Year Treasury yield increased to 3.65%. The Two-Year Treasury yield also increased, as it hovers around 4.26%. This brings the spread between them to -61 basis points.
Compared to yesterday, the market is pricing in a higher chance of a higher Fed Funds rate for December 2023. In fact, the market’s expectations for a rate in the range of 4.25% to 4.5% fell to 16% compared to yesterday’s expectations of 28%.
In addition, the market is now also assigning a 32% probability to a range of 4.75% to 5%. For reference, investors had assigned a 21% chance yesterday.
Last updated: 1:14PM EST
Stocks are mixed so far in today’s trading session. As of 1:14 p.m. EST, the Nasdaq 100 (NDX) and the S&P 500 (SPX) gained 1.2% and 0.2%, respectively. Meanwhile, the Dow Jones Industrial Average (DJIA) slipped 0.5%
Dallas Fed President Lorie Logan expressed concerns about the pace of inflation reduction, hinting that she may not favor a rate pause at the Fed’s June meeting. Despite acknowledging the potential risks of abrupt monetary policy tightening on the job market and the unpredictability of financial conditions, Logan emphasizes that inflation reduction progress is insufficient.
Moreover, she’s conscious of recent banking stresses, comparable to a 25 or 50 basis point increase in the federal funds rate, even though their estimates are uncertain, and other financial conditions have eased since March.
Logan suggests that forthcoming data may support skipping a rate hike in one of the Fed’s meetings. However, she believes the current situation doesn’t justify it. Earlier this week, New York Fed President John Williams indicated that supply and demand are gradually balancing, yet inflation remains high.
Last updated: 11:26AM EST
Stocks are mixed so far in today’s trading. As of 11:26 a.m. EST, the Nasdaq 100 (NDX) and the S&P 500 (SPX) gained 1.2% and 1.4%, respectively. Meanwhile, the Dow Jones Industrial Average (DJIA) slipped 0.1%.
The U.S. housing market took a hit in April, with sales of existing homes declining by 3.4% from the previous month, and 23.2% year-over-year, according to the National Association of Realtors (NAR). The median existing-home price experienced a dip of 1.7% compared to the previous year, reaching $388,800.
A prominent rise in mortgage rates since 2022 has made homeownership increasingly unaffordable for many, negatively affecting demand and discouraging homeowners from selling, thereby reducing supply. Current inventory levels stand at 1.04 million homes, a 7.2% increase from the previous month, yet the housing market continues to grapple with supply constraints.
Despite these challenges, NAR Chief Economist Lawrence Yun noted that sales, although fluctuating, remain above recent lows, and certain regions are still experiencing price gains.
Last updated: 9:30AM EST
Stocks opened mixed on Thursday as investors continued to monitor debt ceiling talks, with the Nasdaq 100 (NDX) up by 0.14% while the S&P 500 (SPX) and the Dow Jones Industrial Average (DJIA) were down by 0.08% and 0.3%, respectively, at 9:30 a.m. EST, May 18.
Another round of earnings from major retailers was announced today, with retailing giant Walmart (WMT) smashing expectations and Chinese e-commerce giant Alibaba (BABA) giving more details of the company’s next strategic moves.
When it comes to economic data, weekly jobless claims for the week ending May 13 fell by 22,000 to 242,000, which was lower than economists’ forecasts of 254,000. However, many economists were skeptical of these numbers, given the job benefits fraud in Massachusetts.
Pantheon Macro Chief Economist Ian Shepherdson commented, “Huge question marks now hang over the weekly jobless claims numbers. The Massachusetts State website states that the bogus claims – made using stolen personal information – are part of a ‘nationwide unemployment benefits fraud scheme’, so we can’t rule out similar distortions to the claims data in other states”
Meanwhile, the Philadelphia Federal Reserve’s gauge of regional business activity increased to a negative 10.4 in May from negative 31.3 in the prior month, indicating deteriorating conditions with a reading below zero. This was the ninth straight negative reading and the eleventh in the past year.
First published: 5:22AM EST
U.S. Futures remain volatile this morning as traders remain hopeful of the outcome of the U.S. Debt Ceiling negotiations. Futures on the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) are up by 0.15%, 0.13%, and 0.06%, respectively, at 5:00 a.m. EST, May 18.
President Biden’s discussions with the congressional leaders yesterday kept spirits high as both parties confided that a default would surely be averted. Nonetheless, POTUS has left for a brief tour of Asia and said that he would give more details on Sunday after his return.
Major negotiations revolve around agreeing on the work requirements for federal food benefits and future spending cuts proposed by Republicans. Democrats, on the other hand, are pushing for revenue-raising measures to be implemented. The possibility of the U.S. defaulting on its debt obligations would result in major economic havoc, and hence, markets are focussing on any signs of positivity from the negotiations.
Meanwhile, big box retailer Walmart (NYSE:WMT) and Chinese e-commerce giant Alibaba Group (NYSE:BABA) will report today before the bell. Retail earnings have been mixed so far, pointing to shifting consumer behavior amidst inflationary pressure and a high interest rate environment.
On the economic front, weekly initial jobless claims are set to be released later in the day. The data will display the strength of the labor market. An increase in jobless claims would mean that the Fed’s rate hikes are taking the desired shape. The Federal Reserve will decide on its rate hike decision in June based on further readings of inflation and labor market statistics.
Elsewhere, European indices were trading in positive territory today, following optimism from the negotiations on raising the U.S. debt ceiling.
Asia-Pacific Markets End Higher
Most Asia-Pacific indices ended the trading session higher today, as traders grow hopeful of the outcome of the U.S. debt ceiling negotiations.
Hong Kong’s Hang Seng and China’s Shanghai Composite indices ended the trading session up by 0.85% and 0.40%, respectively, while the Shenzhen Component index ended down by 0.12%.
At the same time, Japan’s Nikkei and Topix indices ended the trading session higher by 1.60% and 1.14%, respectively.
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