Last updated: 4:02PM EST
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Stocks finished today’s trading session in the green as the Nasdaq 100 (NDX) and S&P 500 (SPX) gained 1.18% and 0.37%, respectively. Meanwhile, the Dow Jones Industrial Average (DJIA) essentially finished flat on the day.
Earlier today, Federal Reserve Chair Jerome Powell asserted his commitment to strengthening the supervision and regulation of midsize banks in his semi-annual monetary policy testimony before the Senate Banking Committee. He cited the recent failures of Silicon Valley Bank, Signature Bank, and First Republic Bank as examples of the need for enhanced oversight.
The hearing highlighted issues such as the rapid bank run on SVB, which underscored the need for regulatory response, and the quantitative tightening of the Fed’s balance sheet. The Fed’s goal remains to bring inflation down to the 2% target, with a “strong majority” of the Federal Open Market Committee (FOMC) projecting two more rate hikes this year.
Contrasting opinions on future rate hikes surfaced among other Fed officials. Federal Reserve Governor Michelle Bowman, speaking at a Fed Listens event in Cleveland, voiced her belief that further policy rate increases would be necessary to bring down inflation.
Her support for the FOMC’s decision to hold the federal funds target rate steady last week, however, contrasted with Atlanta Fed President Raphael Bostic’s view that the central bank should hold rates steady for the remainder of the year. Despite these varying views, the consensus remains to monitor incoming data to ensure inflation is on a consistent downward path.
Last updated: 11:34AM EST
Stock indices cut their losses as the Nasdaq 100 (NDX) is green at the time of writing. On Thursday, the National Association of Realtors released its U.S. Existing Home Sales report, which measures the change in sales of existing residential buildings during the previous month on an annualized basis. Existing home sales came in at 4.3 million for the month of Maay, above the expected 4.25 million.
As a result, existing home sales increased month-over-month by 0.2% after a -3.2% decline in April. Indeed, this is only the second time in the past 16 months that this metric increased, as higher interest rates continue to make homeownership difficult. On a year-over-year basis, sales fell 20.5%.
Last updated: 9:30AM EST
Stock markets opened lower on Thursday morning after Fed Chair Jerome Powell’s hawkish remarks on Wednesday. The Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) are down 0.32%, 0.3%, and 0.2%, respectively, at 9:30 a.m., EST, June 22.
Meanwhile, the jobless claims data seemed to suggest that layoffs in the U.S. are getting worse as jobless claims stood flat at 264,000 on an adjusted basis in the week ending June 17. This was their highest level since late 2021. On an unadjusted basis, jobless claims totaled 250,000 last week, up from around 200,000 at the beginning of May.
However, people collecting unemployment benefits dropped by 13,000 to 1.78 million in the latest week and have actually fallen in four of the past six weeks.
The U.S. current account deficit was up by 1.5% in the first calendar quarter to $219.3 billion as compared to a deficit of $216.2 billion in the fourth quarter. Economists were expecting a current account deficit of $218.2 billion.
First published: 4:52AM EST
U.S. Futures are down this morning, following the steps of stock indices, which closed in the red yesterday. Futures on the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) are down 0.30%, 0.26%, and 0.25%, respectively, at 4:00 a.m., EST, June 22.
A majority of stocks witnessed a steep decline after Fed Chair Jerome Powell tuned in to hawkish comments in testifying before the House Financial Services Committee yesterday. Tech stocks sparked a sell-off as Powell said to expect at least two more rate hikes this year. Advanced Micro Devices (NASDAQ:AMD) and Intel (NASDAQ:INTC) were among the chip stocks that saw the biggest declines in their stock prices.
Today, again, markets will closely monitor Powell’s testimony before the Senate Banking Committee for further comments on inflation and the interest rate pathway. Even though Powell had already said, after the FOMC meeting, that the Fed is not done with its rate hikes, markets are reacting harshly to the hawkish tone of his testimony. A similar fate may await the stock markets today if Powell’s speech invokes more fear. Meanwhile, the weekly initial jobless claims data will be released today, with expectations pegged at 256,000 claims.
On the earnings front, Darden Restaurants (NYSE:DRI) will announce its Q4FY23 results before the market opens today. Also, reporting before the bell is Accenture (NYSE:ACN), a multinational professional services provider.
At the same time, Bitcoin (BTC-USD) rose above the $30,000 mark yesterday, its highest level since April, following Blackrock’s (NYSE:BLK) push to launch a spot Bitcoin exchange-traded fund (ETF).
Elsewhere, European indices are trading in negative territory today, trailing the U.S. counterpart’s plunge on Powell’s comments. The U.K. also awaits the Bank of England’s interest rate decision today, with traders split between a 25- and 50-basis-point expected hike. In the meantime, the Swiss National Bank increased interest rates by a quarter percent, for the fifth time in a row.
Asia-Pacific Markets End Mixed Today
Asia-Pacific indices finished mixed today, with Mainland Chinese, Hong Kong, and Taiwan indices remaining closed for the Dragon Boat Festival public holiday.
Notably, Japanese stocks continue their momentum, with theNikkei still hovering above the 33,000 level. Nikkei ended the trading day down by 0.92%, while the Topix index ended marginally higher by 0.06%.
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