Last Updated 4:00 PM EST
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Stock indices finished today’s trading session in the red as Fed speak still remains hawkish. The Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 fell 0.61%, 1.11%, and 1.83%, respectively.
The communications sector (XLC) was the session’s laggard, as it lost 3.13%. Conversely, the real estate sector (XLRE) was the session’s leader, with a loss of 0.21%. In addition, WTI crude oil gained as it hovers around the mid-$78 per barrel range.
Furthermore, the U.S. 10-Year Treasury yield decreased to 3.63%, a decrease of more than four basis points. Similarly, the Two-Year Treasury yield also decreased, as it hovers around 4.44%.
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 2.2% in the first quarter.
This is higher than its previous estimate of 2.1%, which can be attributed to this morning’s wholesale trade release 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 1:00PM EST
Stocks are in the red so far in today’s trading session. As of 1:00 p.m. EST, the Dow Jones Industrial Average (DJIA), the S&P 500 (SPX), and the Nasdaq 100 (NDX) are down 0.4%, 0.9%, and 1.5%, respectively.
On Wednesday, the Mortgage Bankers Association released its weekly report for the U.S. 30-Year mortgage rate. The mortgage rate decreased to 6.18% compared to last week’s reading of 6.19%.
Due to the relatively stable rate, the number of mortgage applications increased week-over-week by 7.4%, following last week’s decrease of -9%. This indicates that sentiment in the real estate market might be improving.
However, mortgage application volume is down substantially on a year-over-year basis, with the Mortgage Market Index at 249.5 compared to 567.7 on February 9, 2022.
Last updated: 11:30 AM EST
Today’s stock selloff has accelerated since the open as investors continued to assess Powell’s speech from yesterday and await to hear from some more Federal Reserve speakers.
The Nasdaq 100 (NDX), S&P 500 (SPX), and Dow Jones Industrial Average (DJIA) are down 1.8%, 1.1%, and 0.6%, respectively, as of 11:30 a.m. EST, Wednesday.
First published: 5:43AM EST
Futures on the Nasdaq 100 (NDX), S&P 500 (SPX), and Dow Jones Industrial Average (DJIA) are down 0.14%, 0.22%, and 0.17%, respectively, as of 4.30 a.m. EST, Wednesday.
Traders are reassessing Fed Chair Powell’s words from his speech at The Economic Club of Washington, yesterday. Traders celebrated his initial comments that inflation was cooling and was expected to decline significantly in 2023, but reassessed the situation later. The negative note was that the Fed’s interest rate policy will not change anytime soon, and rates will remain high this year.
From the speech, it seems that the Fed will continue with its hawkish stance until wage inflation remains high, especially in the services sector. The Fed will most likely pivot only once inflationary pressures start affecting the labor market.
The other major economic events due to take place this week are the U.S. Initial Jobless Claims on February 9, and the University of Michigan Preliminary Consumer Sentiment Index on February 10.
On the earnings front, Chipotle Mexican Grill (CMG) sank after-hours yesterday, after missing analysts’ estimates. Cruise liner Royal Caribbean (NYSE:RCL) gained after posting narrower-than-expected Q4 losses.
Meanwhile, notable companies reporting earnings today include The Walt Disney Co. (DIS) and Uber (UBER). Other companies reporting on Thursday and Friday include PepsiCo (PEP), AbbVie (ABBV), and PayPal Holdings (NASDAQ:PYPL).
On the other hand, European indices stayed in the green in midday trading today as traders digested Powell’s disinflationary comments. Notably, Britain’s FTSE 100 index marked a record high in early trade, hitting 7,925.02.
Asia-Pacific Markets Remain Mixed
Most indices in the Asia-Pacific markets remained in negative territory on Wednesday. While the European counterparts were enthusiastic about Fed’s comments, the Asian traders balked at the hawkish stance. Hong Kong’s Hang Seng, Mainland China’s Shanghai Composite, and Shenzhen Component indices closed down 0.07%, 0.49%, and 0.72%, respectively.
At the same time, Japan’s Nikkei 225 ended down 0.29%, and Topix closed the day almost flat.
In the meantime, Indian bourses ended in positive territory after the Reserve Bank of India (RBI) announced a 25 basis point interest rate hike today, as expected.
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