Last Updated 4:05 PM EST
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Stock indices finished today’s trading session with a bang as the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) gained 1.2%, 1.22%, and 1.27%, respectively.
All sectors finished positive, but the real estate sector (XLRE) was the session’s laggard, as it gained 0.45%. Conversely, the healthcare (XLV) and communication (XLC) sectors were the session’s leaders, with both gaining 1.57%.
Furthermore, the U.S. 10-Year Treasury yield decreased to 3.72%, a drop of more than seven basis points. Similarly, the Two-Year Treasury yield also decreased, as it hovers around 4.64%.
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 1.8% in the second quarter.
This is lower than its previous estimate of 2.2%, which can be attributed to recent releases from the U.S. Bureau of Labor Statistics, the U.S. Census Bureau, the Federal Reserve Board of Governors, and the U.S. Department of the Treasury’s Bureau of the Fiscal Service.
Last updated: 2:19PM EST
Today’s stock rally continues to gain momentum as the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) are up 0.9%, 1%, and 1.2%, respectively, at the time of writing.
Even though the Federal Reserve hit the brakes on its rate hikes for the first time in over a year during Wednesday’s FOMC policy announcement, it still hinted at a hawkish future, prompting Goldman Sachs to express greater confidence in a rate increase come July. Goldman Sachs thinks the Fed is more likely to mull over another potential hike in November rather than in September, considering the subtle hint at a bi-monthly pace.
In an investor note, Goldman Sachs’ economic research team speculated that by November, the Fed might feel ready to halt rate hikes, given that they anticipate core inflation will have noticeably dropped for a few consecutive months by then. Jerome Powell, the Fed Chair, underlined that one of the main reasons for boosting the “dot plot” was the slower-than-expected dip in core inflation during 2023. However, Goldman Sachs clarified, “We’re still not changing our prediction of one more hike in July, taking the peak rate to somewhere between 5.25-5.5%.”
Last updated: 11:05AM EST
Stocks are in green so far in today’s trading session after retail sales saw a surprise uptick (see update below). At the time of writing, the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) are up 0.5%, 0.6%, and 0.8%, respectively.
On Thursday, the Department of Labor released its Initial Jobless Claims report, which came in worse than expected. In the past week, 262,000 people filed for unemployment insurance for the first time. Expectations were for 250,000 individuals.
When using the four-week average, initial jobless claims were 246,750, up from last week’s reading of 233,380. In addition, Continuing Jobless Claims, which measures the number of unemployed people who qualify for unemployment insurance, came in at 1.775 million. This was above the forecast of 1.761 million and higher than last week’s print of 1.755 million.
Last updated: 9:30AM EST
Stocks opened lower on Thursday morning, with the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) all down 0.11%, 0.1%, and 0.02%, respectively, at 9:30 a.m., EST, June 15.
Retail sales data for the month of May registered a surprise uptick and were up by 0.3% for the month, better than economists’ expectations of a decline of 0.2%. This was the second consecutive month of a rise in retail sales expenditure.
Meanwhile, the gauges of manufacturing sentiment in the U.S., the Philadelphia Federal Reserve’s manufacturing index, and the New York Federal Reserve’s Empire State Index showed signs of improvement after a rough patch.
The Philadelphia Federal Reserve’s manufacturing index continued to point towards a slowdown in manufacturing activity after it slipped to a negative reading of 13.7 in June from negative 10.4 in the prior month, but this was still better than economists’ expectations of a negative reading of 14.8. This was the tenth straight negative reading for the index.
The New York Federal Reserve’s Empire State Index, meanwhile, after being in negative territory for the past five to six months, jumped to a positive reading of 6.6 in June from negative 31.8 in May while economists had forecasted a negative reading of 16.
For these two indices, a negative reading indicates a contraction in the economy.
First published: 4:20AM EST
U.S. Futures are in the red this morning, following Fed Chair Jerome Powell’s hawkish comments on future monetary policy. Futures on the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) are down 0.13%, 0.12%, and 0.15%, respectively, at 4:00 a.m., EST, June 15.
The Federal Reserve kept interest rates unchanged at its latest FOMC meeting, which finished yesterday, sending markets on an upswing. However, the relief rally was short-lived, as Powell quickly warned that we might see two more rate hikes this year following the pause.
The Fed is playing a wait-and-watch game, hoping to see the desired “cumulative” impacts from the series of rate hikes conducted in the past before making any decision for future rate hikes. The current Fed Funds rate remains in the range of 5% to 5.25%, with the projection for year-end pegged at 5.6%. Meanwhile, other economic data sets scheduled for today include weekly initial jobless claims, May’s retail sales data, and Industrial production data.
On the earnings front, tech player Adobe (NASDAQ:ADBE) is slated to release its second quarter Fiscal 2023 results today, after market close. Analysts expect the company’s earnings and revenues to increase year-over-year. Also, ADBE’s website traffic trend reflects a positive picture in the to-be-reported quarter.
Meanwhile, healthcare stocks sank yesterday after executives of UnitedHealth (NYSE:UNH) warned of higher medical costs related to a rise in the number of elective procedures.
Elsewhere, European indices are trading in negative territory today, following the U.S. Fed’s unexpectedly hawkish tone and in anticipation of the European Central Bank’s own rate hike decision due today. The ECB is expected to raise rates by 25 basis points, as inflation remains stubbornly sticky in the 20-bloc nation.
Asia-Pacific Markets End Mixed Today
Asia-Pacific indices ended the trading session mixed today. The People’s Bank of China cut its medium-term lending rate to pump more liquidity into the market. Meanwhile, New Zealand slipped into a technical recession after its Q1 gross domestic product (GDP) contracted by 0.1% year-over-year, after falling 0.7% in the fourth quarter of 2022. In the meantime, Japan’s central bank began its two-day monetary policy meeting today.
Hong Kong’s Hang Seng index and China’s Shanghai Composite and Shenzhen Component indices finished the trading session higher by 2.16%, 0.74%, and 1.81%, respectively.
While Japan’s Nikkei and Topix indices ended marginally down by 0.05% and 0.02%, respectively.
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