Last Updated 4:00 PM EST
Stock indices finished today’s trading session in the red. The Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 fell 0.76%, 0.76%, and 1%, respectively.
Furthermore, the U.S. 10-Year Treasury yield increased to 3.40%, an increase of more than two basis points. Similarly, the Two-Year Treasury yield also increased, as it hovers around 4.12%.
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 3.5% in the fourth quarter.
This is flat compared to its previous estimate, which can be attributed to this morning’s housing starts report from the U.S. Census Bureau.
Nevertheless, inflation continues to be a problem around the world. Therefore, it’ll be interesting to see what the actual GDP growth will be and how it’ll change going forward as higher rates start to impact the economy.
Last Updated 2:23PM EST
Stocks are in the red heading into the final stages of today’s trading session. As of 2:23 p.m. EST, the Dow Jones Industrial Average (DJIA), the S&P 500 (SPX), and the Nasdaq 100 (NDX) are down 0.3%, 0.3%, and 0.4%, respectively.
Earlier today, the Federal Reserve Bank of Philadelphia released its Manufacturing Index report, which measures the general business conditions in Philadelphia.
The report surveys approximately 250 manufacturers. A level above zero indicates improving conditions, while a number below zero indicates the opposite.
For January, the report came in at -8.9 compared to the forecast of -11, meaning that conditions worsened less than expected on a month-over-month basis. Nevertheless, it’s worth mentioning that this is the fifth consecutive monthly decline and the seventh decline in the past eight months.
Last Updated 11:20AM EST
Equity markets are in the red so far into today’s trading session. As of 11:20 a.m. EST, the Dow Jones Industrial Average (DJIA), the S&P 500 (SPX), and the Nasdaq 100 (NDX) are down 0.7%, 0.9%, and 1.1%, respectively.
The Census Bureau released its U.S. Housing Starts report today, which measures the change in new residential buildings that began construction in the reported month on an annualized basis.
In December, housing starts came in at 1.382 million versus expectations of 1.359 million. However, on a month-over-month basis, housing starts fell by -1.4%. This follows a -1.8% drop in last month’s report.
These declines are likely to continue as home builder sentiment remains negative due to higher building and financing costs. Indeed, despite yesterday’s increase, the U.S. NAHB Housing Market Index, which was released yesterday and measures home builder sentiment, remains very pessimistic at 35 out of 100. For reference, this is similar to May 2020 levels.
Last updated: 9:46AM EST
Stocks slumped at open on Thursday morning amid fears of a recession and worries that the Fed would continue to hike interest rates.
The Dow Jones Industrial Average (DJIA) fell 0.6% while the S&P 500 (SPX) dropped 0.63%, as of 9:46 a.m. EST, Thursday. Meanwhile, the Nasdaq 100 (NDX) declined 0.8%.
When it comes to Asian markets, they finished mixed on Thursday. While The Shanghai Composite went up by 0.49%, the Nikkei 225 dragged down the Hang Seng Index as they both fell 1.44% and 0.12%, respectively.
Last updated: 9:06 AM EST
The latest round of economic data including jobless claims and housing data did little to pacify the markets as futures continued to slide.
Initial jobless claims saw an unexpected decline of 15,000 to 190,000 claims in the week ending January 14 – its lowest level since September. The median forecast was for 214,000 jobless claims applications. The advance seasonally adjusted insured unemployment rate remained unchanged at 1.1% for the week ending January 7.
When it comes to housing data, building permits dropped 1.4% month-over-month to 1.382 million versus median forecasts of 1.4 million.
Futures on the Dow Jones Industrial Average (DJIA) fell 0.7% while those on the S&P 500 (SPX) inched down 0.6%, as of 9:06 a.m. EST, Thursday. Meanwhile, the Nasdaq 100 (NDX) futures retreated 0.72%.
First published:6:08 M EST
U.S. stock futures slid early Thursday morning after the market closed the worst day of the month so far, following dismal retail sales data.
Futures on the Dow Jones Industrial Average (DJIA) slid 0.54% while those on the S&P 500 (SPX) inched down 0.56%, as of 6:08 a.m. EST, Thursday. Meanwhile, the Nasdaq 100 (NDX) futures retreated 0.64%.
Dismal Retail Sales Data Gives a Peek into Consumers’ Minds
December’s retail sales volumes reduced at a higher-than-expected pace, indicating a slowdown in customer spending spurred by the higher prices. The number showed a 1.1% year-over-year decline, which was higher than the estimate of 1%. Investors were not happy with the numbers, especially considering that December, being the holiday season, should have seen strong retail sales.
Specifically, department stores reported a 6.6% decline and online sales dipped 1.1%.
It is worth mentioning that the travel industry has been gaining strong momentum as retail sales face the consequences of inflation and fears of a recession. After stalling travel plans for two years due to pandemic-related restrictions, people preferred to take advantage of the holidays to either plan upcoming vacations or take trips rather than spend on retail items.
How the Markets Reacted on Wednesday
Bank stocks led the 1.81% loss in the Dow index on Wednesday. JPMorgan (NYSE:JPM), Bank of America (NYSE:BAC), and Wells Fargo (NYSE:WFC) dropped on Wednesday after the 10-year U.S. Treasury yield hit the lowest level since September.
Moreover, Microsoft’s (NASDAQ:MSFT) job cut announcement also weighed on the stock, which in turn pressed the Dow and the Nasdaq indexes.
The S&P 500 and the Nasdaq 100 declined 1.56% and 1.27% respectively.
Additionally, December’s Producer’s Price Index (PPI), which measures input costs from companies, showed a drop of 0.5%, which was more than what economists surveyed by Dow Jones had expected. However, as a knee-jerk reaction, investors heeded the retail sales data more.
What Happened in the Asian Markets
Asia-Pacific shares maintained good momentum on Wednesday. Japan’s Nikkei 225 index gained 2.5% and the Topix index climbed 1.64%, even after the Bank of Japan announced that it would not change its yield curve control policy. Nonetheless, the policy update did have an effect on the Japanese yen, which weakened by 2.04% against the U.S. dollar.
Hong Kong’s Hang Seng index climbed 0.09% and the Hang Seng Tech Index remained unchanged on Wednesday. Mainland China’s Shanghai Composite and the Shenzhen Component were barely in the green.
Meanwhile, on Wednesday, Australia’s S&P/ASX 200 gained 0.1% at market close.
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