Last Updated 4:05 PM EST
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Stock indices finished today’s trading session in the red after Moody’s downgraded the banking sector. The Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) fell 0.87%, 0.42%, and 0.45%, respectively. The materials sector was the session’s laggard, as it lost 1.05%. Conversely, the healthcare sector was the session’s leader, with a gain of 0.77%.
Furthermore, the U.S. 10-Year Treasury yield decreased to 4.02%, a drop of seven basis points. Similarly, the Two-Year Treasury yield also decreased, as it hovers around 4.76%.
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 4.1% in the third quarter.
This is higher than its previous estimate of 3.9%, which can be attributed to recent releases from the U.S. Census Bureau, the Institute for Supply Management, the U.S. Bureau of Economic Analysis, and the U.S. Bureau of Labor Statistics.
Last updated: 2:41PM EST
Stocks are in the red so far in today’s trading. In addition, American consumers seem to continue reaching for their credit cards. The New York Fed’s latest Quarterly Report on Household Debt and Credit shows credit card balances soaring past the $1 trillion mark in Q2, the loftiest since records began in 2003. Not only did credit card balances experience a 4.6% growth, but we also saw an addition of 5.48 million new accounts, pushing the overall number to 578.35 million.
As Joelle Scally of the New York Fed observed, “Credit card balances saw brisk growth in the second quarter.” Furthermore, delinquencies increased to 5.08% of total credit card balances, which is pretty much in line with pre-pandemic norms.
However, other debts told varied tales. While mortgage balances held steady around the $12.01 trillion mark, auto debts accelerated by $20 billion, landing at $1.58 trillion. Meanwhile, student debts saw a considerable dip, dropping by $35 billion to settle at $1.57 trillion.
Last updated: 11:38AM EST
Earlier today, Philadelphia Federal Reserve Bank President Patrick Harker hinted that the Federal Open Market Committee might pause after a series of rate hikes since March 2022. However, Harker clarified that this won’t necessarily lead to a rate cut. Speaking at the Philadelphia Business Journal’s economic event, he emphasized that barring any shocking new data, this steady stance could be maintained till the next Fed meeting in September. While Harker sees the potential for an economic “soft landing” on the horizon, concerns remain about restarting student loan payments and rising credit card balances.
Harker projects a cooling down of core PCE inflation rates: dropping to just under 4% by the end of 2023, then below 3% in 2024, and finally stabilizing at 2% by 2025. Additionally, he foresees a slight increase in unemployment and a moderate dip in GDP growth. Commenting on the past year’s inflation drivers, Harker attributed it to supply chain glitches, easy monetary policies, and significant fiscal stimulus. But with adjustments in these areas, he remains optimistic, saying, “I think the ‘soft landing’ is quite plausible and quite possible.”
Last updated: 9:30AM EST
Stocks opened lower on Tuesday as the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) are down by 0.8%, 0.63%, and 0.69%, respectively, at 9:30 a.m., EST, August 8.
Meanwhile, the latest U.S. economic data indicated that the trade deficit dropped by 4% in June to $65.5 billion due to falling imports as a result of declining global manufacturing and a shift in consumer spending habits.
The U.S. trade deficit fell 4% in June to $65.5 billion versus economists’ forecasts of $65 billion due to declining imports, reflecting a shift in consumer spending habits and a slump in global manufacturing. On a year-to-date basis, the trade deficit fell to $117.7 billion, or by 22.3% year-over-year.
Exports inched up to $247.5 billion in June while imports stood at $313 billion.
First published: 4:06AM EST
Futures on the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) are down by 0.36%, 0.26%, and 0.22%, respectively, at 4:00 a.m., EST, August 8.
The second quarter earnings season continues to throw surprises. Traders are enjoying the show while it lasts. The three major averages ended in positive territory yesterday, lifted by some solid earnings performances. The Dow touched one of its best levels in the last two months. Shares of Warren Buffett-led Berkshire Hathaway (BRK.B) touched a 52-week high on August 7, following solid Q2 results. Also, Chegg shares (CHGG) soared over 20% in after-hours trading thanks to its dabbling in AI and quarterly revenue that exceeded expectations.
Plus, Palantir stock (PLTR) gained in after-hours trading after reporting in-line revenues and earnings. Lucid stock (LCID) also gained in after-hours trading despite a Q2 earnings miss. Notable companies reporting earnings today include AMC Entertainment (AMC), United Parcel Service (UPS), Eli Lily (LLY), Under Armour (UAA), Li Auto (LI), and Rivian (RIVN).
Meanwhile, the real focus this week continues to be the Consumer Price Index (CPI) and the Producer Price Index (PPI) reports due on August 10 and 11. Should the inflation numbers come in higher than anticipated, it could drag the markets down towards the end of the week. The Federal Reserve’s interest rate decision in September will depend on these two reports. Elsewhere, China’s imports and exports data for July came in worse than expected, dragging down Chinese markets, and stoking fears of a delayed economic recovery.
Notably, European indices are trading in the red on Tuesday amid the action-packed earnings season.
Asia-Pacific Markets End Mixed on Tuesday
Asia-Pacific indices finished mixed on Tuesday following a worse-than-expected trade balance report from China. China’s July imports fell 12.4% year-over-year, while exports declined 14.5% year-over-year. The report flags the uncertainty in China’s economic recovery and the need for greater stimulus to revive the mainland.
Hong Kong’s Hang Seng index and China’s Shanghai Composite and Shenzhen Component indices finished lower by 1.81%, 0.25%, and 0.42%, respectively.
On the other hand, Japan’s Nikkei and Topix indices ended up by 0.38% and 0.34%, respectively.
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