Last Updated 4:05 PM EST
Stock indices finished today’s trading session mixed. The S&P 500 (SPX) and the Nasdaq 100 (NDX) gained 0.88% and 2.46%, respectively, as they were led by Nvidia’s strong earnings report. Meanwhile, the Dow Jones Industrial Average (DJIA) fell 0.11%.
Earlier today, Richmond Fed President Tom Barkin shared his insights, suggesting that we’re witnessing a deceleration in demand. This cooling phase follows an extraordinarily high demand period amid the pandemic, coupled with the Fed’s tightening monetary policy and banking sector pressures.
When quizzed about a potential recession, Barkin chose not to speculate. He did, however, discuss the state of the job market, indicating a shift from an environment where labor was readily available to one where labor shortages persist.
Multiple factors contribute to this tight labor market. Barkin cited the fallout of the pandemic, leading some workers to opt out of employment, coupled with reduced immigration. Despite the overall tightening, Barkin underscored that the demand for skilled trades remains exceptionally strong, primarily because there’s a shortfall of adequately trained individuals.
In a follow-up discussion on commercial real estate, Barkin differentiated between the sectors. He revealed that office real estate, particularly properties with lower ratings, is undergoing significant distress. On the flip side, sectors like warehouses and multifamily housing maintain their robust health.
Last Updated 1:05PM EST
Stocks remain mixed so far in today’s trading session. As of 1:05 p.m. EST, the S&P 500 (SPX) and the Nasdaq 100 (NDX) are up 0.7% and 2.4%, respectively. Meanwhile, the Dow Jones Industrial Average (DJIA) is down 0.5%.
As the U.S. government teeters close to its debt ceiling, hopes of an agreement to avert a financial crisis are brewing in the capital. U.S. Representative Kevin Hern, leader of the largest Republican caucus, expressed optimism that a resolution to raise the $31.4T debt limit is likely by the end of the week.
Despite current White House and Republican debt limit proposals differing by less than $70B, sources suggest the focus is on a slimmed-down agreement centered on a few crucial figures.
While negotiations persist, the Biden administration prepares for potential fiscal fallout. The Treasury Department is reportedly contemplating a delay in certain payments past June 1st, a strategy devised during the 2011 debt-ceiling impasse.
Treasury Secretary Janet Yellen admitted that if Congress fails to raise or suspend the debt limit soon, difficult decisions will need to be made. These could include prioritizing debt payments to calm global financial markets at the risk of delaying Social Security checks.
Amidst these uncertainties, one thing is certain – not everyone will be satisfied with the final agreement, as Kevin McCarthy, House Speaker, pragmatically pointed out.
Last Updated 11:05AM EST
Stocks are mixed so far in today’s trading session. As of 11:05 a.m. EST, the S&P 500 (SPX) and the Nasdaq 100 (NDX) are up 0.8% and 2.2%, respectively, as Nvidia’s earnings continue to positively impact tech stocks. Meanwhile, the Dow Jones Industrial Average (DJIA) is down 0.1%.
On Thursday, the National Association of Realtors released its Pending Home Sales report, which measures the month-over-month change in the number of home sales that have yet to close but are contracted to be sold. This measure excludes homes that are newly constructed.
During April, Pending Home Sales remained flat compared to the previous month, which was worse than the expected 0.5% increase. This is after a -5.2% decrease in the previous report. Of the last 12 reports issued, only four of them saw an increase.
In addition, the Pending Home Sales Index came in at 78.9, which is lower than the 99.2 reading from the same time last year. This equates to an approximate decline of 20.5% on a year-over-year basis.
Last updated: 9:30AM EST
The blockbuster Nvidia earnings fuelled a tech rally with the Nasdaq 100 (NDX) and the S&P 500 (SPX) up by 1.4% and by 0.6%, respectively while the Dow Jones Industrial Average (DJIA) was down by 0.22% at 9:37 a.m. EST, May 24.
The latest round of economic data indicated that initial weekly jobless claims rose less than expected to 229,000 in the week ending May 20, up by 4,000 from the prior week but below economists’ forecasts of 250,000. Continuing jobless claims stood at 1.79 million versus expectations of 1.8 million.
However, there are widespread expectations that a rise in U.S. jobless claims since March could eventually be wiped out after the state of Massachusetts lowers its jobless claims estimate to reflect a recent rash of benefit fraud. The state is aggressively moving to remove these fraudulent claims from its numbers.
Meanwhile, the U.S. GDP data showed that it ticked up higher by 1.3%, exceeding the forecast of a growth rate of 1.1% while the personal consumption expenditure (PCE) index remained unchanged from its prior estimate at 4.2% while core inflation remained at 5% versus estimates of 4.9%.
First published: 5:21AM EST
U.S. Futures are trending mixed this morning with two important economic events unfolding. Futures on the Dow Jones Industrial Average (DJIA) are down 0.23% on the news that rating agency Fitch has put the U.S.’ AAA long-term issuer rating under negative watch. This is thanks to the prolonged negotiations on the U.S. debt ceiling. Although the U.S. is most likely to reach a deal, Fitch is preparing for any possibility of missing obligations.
Meanwhile, futures on the Nasdaq 100 (NDX) are rallying up 1.69% after chip-maker Nvidia (NASDAQ:NVDA) hit an all-time high yesterday, posting stellar Q1FY24 results. Shares jumped 25% in extended trading following the robust Q2 forecast as demand for Nvidia’s AI-generative chips is expected to explode. At the same time, futures on the S&P 500 (SPX) are up by 0.59% at 5:00 a.m., EST, May 25.
On the other hand, the FOMC minutes from the May meeting, which were released yesterday, showed that Fed officials were unable to reach a consensus on the next interest rate decision. They will closely monitor the incoming data sets before deciding whether to pause or hike rates in June.
On the economic front, weekly initial jobless claims, pending home sales data, and the second reading on the first quarter’s Gross Domestic Product (GDP) are expected today.
On the earnings front, retailers Costco Wholesale (NASDAQ:COST), Best Buy (NYSE:BBY), Ralph Lauren (NYSE:RL), and Dollar Tree (NASDAQ:DLTR) report today, before the bell.
Most European indices are trading in the red today as ongoing discussions on the U.S. debt limit raise concerns. Also, statistics show that the German economy has slipped into a technical recession since its GDP fell to -0.3% in the first quarter.
Asia-Pacific Markets End Mixed
Asia-Pacific indices also ended the trading session mixed today following looming concerns over a U.S. debt default. Elsewhere, the Bank of Korea left benchmark interest rates unchanged for the third time in a row.
Hong Kong’s Hang Seng, China’s Shanghai Composite, and Shenzhen Component indices ended the trading session down by 1.93%, 0.11%, and 0.22%, respectively.
At the same time, Japan’s Nikkei ended up 0.39% while the Topix index ended the trading day down by 0.29%.
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