Last Updated 4:00PM EST
Furthermore, the U.S. 10-Year Treasury yield increased to 3.49%, an increase of more than nine basis points. Similarly, the Two-Year Treasury yield also increased, as it hovers around 4.18%.
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 Existing Home Sales report from the National Association of Realtors.
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 2:35 PM EST
Today’s stock rally continues to gain momentum as we head into the late stages of today’s session. As of 2:35 p.m. EST, the Dow Jones Industrial Average (DJIA), the S&P 500 (SPX), and the Nasdaq 100 (NDX) are up 0.6%, 1.4%, and 2.4%, respectively.
Earlier today, Federal Reserve Governor Christopher Waller shared his views on monetary policy. He believes that a 25 basis point rate hike would be appropriate during the next meeting. He cites three reasons for this.
Firstly, the labor market is strong, with an unemployment rate that is hovering around all-time lows at 3.5%. In addition, he noted that wage growth has been running higher as of late based on the Atlanta Fed’s wage tracker tool. He also commented that core CPI inflation has essentially moved sideways throughout 2022.
As a result, investors who were hoping for a Fed pivot will not get one anytime soon as the central bank remains hawkish in its fight against inflation.
Last Updated 11:12AM EST
Stock indices are in the green so far in today’s trading session. As of 11:12 p.m. EST, the Dow Jones Industrial Average (DJIA), the S&P 500 (SPX), and the Nasdaq 100 (NDX) are up 0.5%, 0.8%, and 1.4%, respectively
On Friday, the National Association of Realtors released its U.S. Existing Home Sales report, which measures the change in sales of existing residential buildings during the previous month on an annualized basis. Existing home sales came in at 4.02 million for the month of December, above the expected 3.96 million.
This figure was the lowest reading since June 2020, as existing home sales declined month-over-month by -1.5%, on top of the -7.9% decline in November. Indeed, this represents the 11th straight month of declines, as higher interest rates continue to make homeownership difficult. On a year-over-year basis, sales fell 34%.
It is likely that this downward trend will continue as the Federal Reserve continues to hike interest rates to combat inflation.
Last updated: 9:45AM EST
First published:6:06AM EST
Stock futures were mixed early Friday morning as investors parsed through mixed earnings reports while worrying about the monetary policy.
Nordstrom’s (NYSE:JWN) tepid earnings results sent its shares down more than 5% in the pre-market trading Friday. On the other hand, Netflix (NASDAQ:NFLX) shares surged almost 6% in the early morning hours of Friday after it reported a higher-than-expected subscriber count.
At the end of Thursday’s session, the S&P and the Dow lost 0.76% each. Meanwhile, the Nasdaq 100 shed 1%. All three indexes are on course to close the week lower than they began, with the Dow, S&P 500, Nasdaq 100 having lost 3.67%, 2.5%, and 2% already, respectively.
The retail sales data that was out earlier this week showed lower-than-expected numbers, which concerned traders. As the market inches closer to the next round of interest rate hikes, the growing fear of a slowing economy is taking precedence over the joy of declining inflation.
However, IMF (International Monetary Fund) chief Kristalina Georgieva expressed some optimism about the global economy, saying that the expectation of recovery around the globe has lifted slightly, but still has room to improve.
What is Happening in the Asia-Pacific?
Japan’s inflation rose 4% year-over-year in December, the nation’s highest since 1981. The high inflation reading is likely to push the Bank of Japan to tighten its very-loose monetary policy later in the year. Earlier this week, however, the central bank announced that it will not be changing its policy, which is possibly why markets relief-rallied on Friday.
The Nikkei 225 closed Friday’s session 0.56% higher, while the Topix gained 0.59%.
Elsewhere in the Asia-Pacific region, South Korea’s Kospi and Kosdaq climbed 0.63% and 0.71% respectively.
Hong Kong’s Hang Seng index rose 1.6% in the last hour of Friday. Interestingly, the People’s Bank of China announced that it is keeping the 1-year and 5-year interest rates pat, leading to a 0.76% rise in Mainland China’s Shanghai Composite as well as a 0.57% rise in the Shenzhen Component.