Last Updated 4:01 PM EST
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Stock indices finished today’s trading session mixed. The S&P 500 (SPX) and the Nasdaq 100 (NDX) gained 0.14% and 0.52%, respectively. Conversely, the Dow Jones Industrial Average (DJIA) fell 0.18%.
Furthermore, the U.S. 10-Year Treasury yield increased to 3.98%, a slight increase of one basis point. Similarly, the Two-Year Treasury yield also increased, as it hovers around 5.06%.
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 2.6% in the first quarter. This is higher than its previous estimate of 2%, which can be attributed to this morning’s job reports.
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: 2:00PM EST
Stocks are in the red heading into the final couple hours of today’s trading session. As of 2:00 p.m. EST, the Dow Jones Industrial Average (DJIA), the S&P 500 (SPX), and the Nasdaq 100 (NDX) are down 0.6%, 0.3%, and 0.1%, respectively.
Jerome Powell made quite a splash yesterday after announcing that he expects interest rates to climb higher than initially anticipated. However, north of the border, the Bank of Canada decided to keep interest rates steady today at 4.5%.
As the borrowing rates between the two countries diverge, a higher Fed Funds rate will strengthen the U.S. dollar relative to the Canadian dollar. Indeed, the USD to CAD exchange rate has increased from C$1.36 to C$1.38 since yesterday.
This is good news for American importers as the stronger U.S. dollar will lead to lower prices on the goods they buy from Canada, which is the country’s largest trading partner. In addition, it’s also good for Canadian exporters as it will increase the demand for their goods.
This could theoretically help ease inflation in the U.S., although the exchange rate is only a small piece of the puzzle.
Last updated: 11:13AM EST
Stock indices are mixed so far in today’s trading session. As of 11:13 a.m. EST, the S&P 500 (SPX) and the Nasdaq 100 (NDX) are up 0.2% and 0.5%, respectively. Conversely, the Dow Jones Industrial Average (DJIA) is down 0.2%.
Earlier today, the Bureau of Labor Statistics released its JOLTs Job Openings report, which helps measure job vacancies in the U.S. The number came in at 10.824 million job openings for January, above the expected 10.5 million.
Although lower than the peak of 11.855 million, job openings are still near their highs. Nonetheless, job openings are on an overall decline, and it will be interesting to see if this trend continues as rates continue to rise while growth slows down.
In addition, it’s important to remember that this data is for January, thus, making it a lagging indicator. Since then, many companies have announced that they will reduce their workforce in order to cut costs.
Last updated: 10:00AM EST
U.S. stocks opened cautiously higher on Wednesday after Tuesday’s sell-off induced by Powell’s remarks. The Nasdaq 100 (NDX) and the Dow Jones Industrial Average (DJIA) are up 0.1% and 0.08% while the S&P 500 (SPX) declined by 0.02%, respectively, at 9:30 a.m. EST, March 8.
Meanwhile, the Mortgage Bankers Association (MBA) data showed that demand for mortgages rose by 7.4% in the latest week ending March 3. The demand for both repurchases and refinancing increased pushing the MBA index up by 7.4% to 201.5 for the week ending March 3 from the prior week.
The ADP jobs report for the month of February indicated that job growth remained strong, increasing by 242,000 from 106,000 in January compared to a consensus of 200,000. However, annual pay rose by 7.2% year-over-year, a slight decline from a pace of 7.3% in January and December.
The trade deficit data indicated that the trade deficit rose by 1.6% in January to $68.3 billion and was in line with consensus forecasts. While imports increased by 3% to $325.8 billion in January, exports advanced by 3.4% to $257.5 billion.
First published: 5:30AM EST
U.S. futures are trading modestly higher on Wednesday after markets digested the latest hawkish comments from Fed Chair Powell yesterday evening. Futures on the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) are up 0.05%, 0.06%, and 0.09%, respectively, at 5:00 a.m. EST, March 8.
In his speech before the Senate Banking, Housing, and Urban Affairs Committee, Powell stated the possible need for higher interest rate hikes in the future to curb stubbornly high inflation. Following the speech, markets are now digesting a 50 basis point rate hike in the upcoming Federal Open Market Committee (FOMC) meeting, scheduled for March 21-22, 2023. The market’s targeted terminal rate expectation has now jumped to between 5.50% and 5.75%.
Today, traders eagerly await the Fed Chair’s comments in front of the House Financial Services Committee. Also, Richmond Fed President Tom Barkin will be sharing his views on the labor market later today.
On the economic front, the U.S. initial jobless claims will be out on March 9, followed by February’s Nonfarm Payrolls, Labor Force Participation Rate, and Unemployment Rate reports on March 10. Traders surely hope that the U.S. has added fewer jobs in February, which may compel the Fed to re-evaluate its current strong hawkish stance.
On the earnings front, fewer companies are reporting this week, with results from Asana (NYSE:ASAN), Campbell Soup (NYSE:CPB), and MongoDB (NASDAQ:MDB) expected today.
Meanwhile, European indices are trading mixed today, following Powell’s speech on the need for tighter monetary policy.
Asia-Pacific Markets Remain Volatile
A majority of Asia-Pacific markets ended the trading session in the red today due to concerns about the possibility of a higher interest rate hike by the U.S. Federal Reserve in the next FOMC meeting.
Following a volatile day, Hong Kong’s Hang Seng and China’s Shanghai Composite indices closed down 2.35% and 0.06%, respectively. While the Shenzhen Component index closed up 0.32%.
On the other hand, Japan’s Nikkei and Topix indices ended the day up 0.48% and 0.30%, respectively.
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