Last Updated 4:05 PM EST
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Stock indices finished today’s trading session mixed amid new economic data and Fedspeak (see previous updates). Indeed, the S&P 500 (SPX) and the Dow Jones Industrial Average (DJIA) gained 0.18% and 0.33%, respectively. On the other hand, the Nasdaq 100 (NDX) slipped 0.07%. Furthermore, the U.S. 10-Year Treasury yield increased to 4.18%, an increase of seven basis points. Similarly, the Two-Year Treasury yield also increased, as it hovers around 4.88%.
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 5.6% in the third quarter.
This remains unchanged from the previous estimate, which can be attributed to this morning’s releases from the U.S. Census Bureau, the U.S. Bureau of Labor Statistics, and the Institute for Supply Management.
Last updated: 2:30PM EST
Earlier today, Cleveland Fed President Loretta Mester stated that inflation continues to hover at concerning levels while the job market stays robust despite recent improvements.
Mester observed that the Fed’s strategy to raise interest rates is fostering a healthier equilibrium in labor demand and supply. This is evident in the reduced job growth and fewer job openings, as demonstrated by the recent employment report she reviewed.
Mester emphasized the importance of closely monitoring market dynamics and economic indicators to shape future monetary decisions. Without disclosing her recommendations for the Federal Reserve’s upcoming meeting, she raised questions about whether the current federal funds rate is restrictive enough to steadily drive inflation towards the desired 2%.
Last updated: 11:51AM EST
Stocks are lower so far in today’s trading session. On Friday, the Institute for Supply Management released its monthly report for the ISM Manufacturing Purchasing Managers’ Index, which measures the month-over-month change in production levels. A number over 50 represents an expansion, whereas anything below 50 means a contraction. The report came in at 47.6, which was higher than the expected 47.
Although this indicator is higher than last month’s reading of 46.4, it’s still in an overall decline and has been downtrending ever since its peak in April 2021, when it hit a high of 64.7. Indeed, this is the tenth consecutive month where manufacturing has contracted.
Last updated: 9:30AM EST
Stocks opened higher on the last trading day of the week, with the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) up by 0.65%, 0.63% and 0.62%, respectively, at 9:30 a.m. EST, September 1.
The jobs report for August pointed to a softening labor market, with the U.S. nonfarm payrolls increased by 187,000 in August, exceeding the consensus forecasts of 170,000. This was a jump from the creation of 157,000 jobs in July.
The unemployment rate stood at 3.8%, compared with 3.5% in July, and was above economists’ projections of 3.5%. The rise in wages was less than expected, with average hourly earnings up by just 0.2% month-over-month to $33.82. At an annual pace, wages grew by 4.3%.
Following the jobs data, traders are factoring in a 7% probability of the Fed hiking its interest rates by 25 basis points in September, according to the CME FedWatch tool.
First published: 5:15AM EST
U.S. Futures are in the green on the first trading day of September. Futures on the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) are up by 0.07%, 0.20%, and 0.25%, respectively, at 5:00 a.m. EST, September 1.
The three major averages ended August on a negative footing. Historically, August and September are considered to be the dullest months for the U.S. stock markets. Notably, July’s personal consumption expenditures (PCE) data came in as expected. The Fed’s favorite Inflation gauge grew 0.2% month-over-month in July while growing 4.2% annually. Meanwhile, initial jobless claims fell by 4,000 to 228,000 in the week ending August 26.
Importantly, traders will pay attention to the non-farm payroll data due today morning. Experts are projecting 170,000 job additions in August, much lower than the 187,000 jobs created in July.
The latest data points reflect that the U.S. labor market may be finally cooling down. Accordingly, markets are expecting the Fed to pause the rate hike cycle in September. Meanwhile, the WTI crude oil futures are also in the green, hovering above $83.78 as of the last check.
On the earnings front, shares of Broadcom (AVGO) fell nearly 5% in after-hours trading yesterday, after giving disappointing guidance. The semiconductor player’s Q3FY23 results beat analysts’ estimates on both the top and bottom lines.
On the other hand, software company MongoDB (MDB) gained 4.9% in extended trading after shattering Q2FY24 expectations. Also, computer maker Dell (DELL) jumped 8.5% in after-hours trading after beating both earnings and sales estimates. Athletic apparel retailer Lululemon Athletica (LULU) stock rose 1.5% in extended trading after reporting solid beat-and-raise results. There are no important earnings results scheduled for today.
Elsewhere, a majority of European markets are in the green today following the optimism in the U.S. counterparts.
Asia-Pacific Markets End Positive on Friday
Most Asia-Pacific indices ended in the green on Friday. Hong Kong’s markets halted trading today as the nation remains on alert with typhoon Saola approaching.
China’s Shanghai Composite and Shenzhen Component indices closed up 0.43% and 0.44%, respectively. The Caixin/S&P global manufacturing purchasing managers’ index showed that China’s factory output improved in August, rising to 51.0. also, the People Bank of China announced a 200-basis points reduction in foreign exchange reserve requirements for financial institutions, effective September 15.
Similarly, Japan’s Nikkei and Topix indices finished higher by 0.28% and 0.76%, respectively.
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