Stock Market News Today, 7/27/23 – Stocks Close Lower as Investors Digest Economic Data

Last Updated 4:04 PM EST

Stock indices finished today’s trading session in the red as investors digested economic data. The Nasdaq 100 (NDX), the S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) fell 0.22%, 0.64%, and 0.67%, respectively. The real estate sector (XLRE) was the session’s laggard, as it fell 2.11%. Conversely, the communication sector (XLC) was the session’s leader, with a gain of 0.84%.

Furthermore, the U.S. 10-Year Treasury yield increased to 4%. The Two-Year Treasury yield also increased, as it hovers around 4.93%. This brings the spread between them to -93 basis points.

Compared to yesterday, the market is pricing in a significantly higher chance of a lower Fed Funds rate for December 2023. In fact, the market’s expectations for a rate in the range of 5.25% to 5.5% increased to 63.4% compared to yesterday’s expectations of 8.1%.

In addition, the market is now also assigning a 26.5% probability to a range of 5.5% to 5.75%. For reference, investors had assigned a 60.5% chance yesterday.

Last Updated: 2:15PM EST

Stock indices are mixed so far in today’s trading session. Earlier today, the Census Bureau released its U.S. Core Durable Goods Orders report for the month of November, which measures the change in order value for long-lasting big-ticket items. This report excludes the impact of aircraft orders because they tend to be very volatile. Therefore, it is generally agreed upon that the core reading provides a better gauge of ordering trends.

For the month of December, Core Durable Goods Orders increased by 0.6%, which was better than the expected 0% on a month-over-month basis and the same as the previous month. However, when including aircraft orders, growth was 4.7%, which beat expectations of 1%.

Last Updated: 11:10AM EST

Stocks are in the green so far in today’s trading session after better-than-expected economic data. As of 11:10 a.m. EST, the Nasdaq 100 (NDX) and the S&P 500 (SPX) are up 1.2% and 0.4%, respectively. Meanwhile, the Dow Jones Industrial Average (DJIA) is flat.

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 June, Pending Home Sales increased by 0.3% compared to May, which was better than the expected -0.5% decrease. This is after a -2.5% decrease in the previous report.

Nevertheless, the Pending Home Sales Index came in at 76.8, which is lower than the 90.7 reading from the same time last year. This equates to an approximate decline of 15.3% on a year-over-year basis.

Last updated: 9:30 AM EST

Stocks opened higher on Thursday as investors digested U.S. GDP data, with the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) up by 1.32%, 0.76%, and 0.17%, respectively, at 9:30 a.m., EST, July 27.

U.S. GDP rose by 2.4% in Q2 on an annual basis as compared to consensus forecasts of 1.5% and up from 2% in Q1, led by higher consumer spending, non-residential fixed investments, rising spending from state, federal and local governments, and private inventory investment.

Initial jobless claims unexpectedly fell for the week ended July 22 by 7000 to 221,000 as compared to economists’ forecasts of 235,000 versus prior unrevised claims of 228,000.

Meanwhile, June wholesale inventories unexpectedly dropped to $908 billion, while retail inventories stood at $783.9 billion.

First published: 4:22AM EST

U.S. Futures are inching higher following the Fed’s expected 25 basis points interest rate hike. The latest hike brings the benchmark borrowing costs to a new target range of 5.25%-5.5%, the highest in 22 years. Futures on the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) are up by 1.02%, 0.48%, and 0.16%, respectively, at 4:00 a.m. EST, July 27.

Fed Chair Jerome Powell said in the speech that the Fed will remain data dependent and any future rate hikes or pauses will be determined based on economic datasets. Traders seem to be ignoring Fed’s hawkish comments and continue to push the markets higher amidst the peak of the Q2 earnings season. The Dow finished its 13^th straight session of gain yesterday, one of its longest winning streaks.

Turning to the earnings front, Meta Platforms stock (META) surged in after-hours trading yesterday after reporting both earnings and revenue beats and a solid outlook. Also, Barbie maker Mattel (MAT) posted an expected profit in Q2 results and beat analysts’ expectations on sales. The stock also continued to rise steadily since the blockbuster hit of its Barbie movie. On the other hand, shares of restaurant chain Chipotle (CMG) plunged in post-market trading after missing sales expectations in Q2.

Companies reporting today include McDonald’s (MCD), Intel (INTC), Ford Motor (F), and T-Mobile (TMUS), among others. In other news, the Justice Department and Environmental Protection Agency have started investigating telecom companies AT&T (T) and Verizon (VZ) for their possible fault in leaving thousands of lead-laden cables unattended under the soil or in the waters across the U.S. A series of reports and investigations from the Wall Street Journal led to the initial revelation of the potential hazards these cables could lead to.  

On the economic front, we will see the Weekly Initial Jobless Claims, preliminary Q2 GDP estimates, and June Durable Goods data.

Elsewhere, European indices are trading higher this morning, with the action-packed earnings season in full force. Also, the European Central Bank (ECB) will decide its monetary policy decision today, with expectations of a 25-bps rate hike largely priced in.

Asia-Pacific Markets Mostly in Green

A majority of Asia-Pacific indices finished in the green on Thursday, following the Fed’s expected rate hike decision with the possibility of future rate hikes in sight.

Hong Kong’s Hang Seng index ended higher by 1.46%, while China’s Shanghai Composite and Shenzhen Component indices finished lower by 0.20% and 0.41%, respectively.

Similarly, Japan’s Nikkei and Topix indices ended up by 0.68% and 0.53%, respectively.

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