Stock Market News Today: Stocks Finish Mixed as Lending Standards Tighten

Last Updated: 4:00PM EST

Stock indices finished mixed in today’s trading session. The Dow Jones Industrial Average (DJIA) fell 0.17%, while the Nasdaq 100 (NDX) gained 0.25%. On the other hand, the S&P 500 (SPX) finished relatively flat with a small 0.04% rise.

As banks grow increasingly uneasy about deposit outflows, plummeting collateral values, and shaky credit quality, lending standards have continued to tighten in Q1, according to the Federal Reserve’s latest Senior Loan Officer Opinion Survey (SLOOS).

At the same time, the demand for credit has taken a nosedive, particularly among large and medium-sized firms. With the Fed’s aggressive rate hikes reducing credit access, they’re now considering hitting the brakes on rate increases to see how the economy reacts.

Chicago Fed President Austan Goolsbee advises caution when it comes to deciding whether to pause interest rate hikes in June. Tighter credit conditions, a potential recession, and a still-tight labor market make the decision anything but straightforward.

Goolsbee also warns of the chaos that could ensue if the U.S. defaults on its debt obligations, which could lead to a sharp drop in consumer confidence and increased stress in the banking sector.

Nevertheless, on a more optimistic note, Stifel has raised its S&P 500 target for the year, expecting a substantial drop in inflation and an economic rebound in mid-2023. This upswing is anticipated to favor cyclical stocks over defensive ones, with inflation predicted to slow but remain above the 1-2% range seen from 2009 to 2019.

Last Updated: 1:30PM EST

Stock indices are mixed so far in today’s trading session. As of 1:30 p.m. EST, the Dow Jones Industrial Average (DJIA) is down 0.2%, while the Nasdaq 100 (NDX) is up 0.2%. On the other hand, the S&P 500 (SPX) is flat on the day.

The latest survey from the Federal Reserve Bank of New York suggests that U.S. consumers are feeling a bit uncertain about the economy. In the short term, they’re expecting lower inflation, but they’re still concerned about the medium and long term.

People also seem to think their incomes and spending will grow more slowly than they’d previously thought. And when it comes to the job market, well, things aren’t looking too rosy either, with expectations of higher unemployment and a greater chance of losing one’s job.

Breaking it down, people’s expectations for inflation one year from now have dropped to 4.4%, but they’ve risen slightly for three and five years ahead, at 2.9% and 2.6%, respectively.

As for the job market, the average expectation of unemployment rising in a year has climbed to 41.8%, while the perceived risk of losing a job in the next 12 months has increased to 12.2%.

In fact, the likelihood of finding a new job if someone loses their current one, has dipped to 55.2%. Additionally, people expect their household income to grow by just 3.1%, and they think their spending will grow by 5.2%.

Finally, when it comes to getting credit, consumers’ opinions are pretty mixed, with fewer people reporting easier or more difficult access to credit compared to March.

Last Updated: 11:25AM EST

Stocks are in the red so far in today’s trading session, although they are slightly in the red. As of 11:25 a.m. EST, the Dow Jones Industrial Average (DJIA), the S&P 500 (SPX), and the Nasdaq 100 (NDX) are down 0.3%, 0.1%, and 0.2%, respectively.

Last Updated: 9:30AM EST

Stocks opened close to the flat line on Monday morning after the major averages came off a volatile trading week. The Nasdaq 100 (NDX) is down 0.18%, while the S&P 500 (SPX) and the Dow Jones Industrial Average (DJIA) are up by 0.1% and 0.2%, respectively, at 9:30 a.m. EST, May 8. The three major indices reversed most of the weekly losses with Friday’s winning streak. Regional banks rebounded, led by an uptick in PacWest Bancorp’s (NASDAQ: PACW) stock.

Meanwhile, the week ahead will likely see a reset of calm after last week’s storm. Investors should find an incentive to invest as they move past the Fed’s rate hike decision and Fed Chair Powell’s dovish stance last week. The recent banking crisis has pushed investors to rush to the precious metal gold as a safe haven investment, pushing the trading in gold futures towards its all-time high last week.

On the other hand, the labor market remains robust. The April jobs report came in stronger-than-expected. The U.S. generated 253,000 jobs against the consensus expectation of 178,000, while the unemployment rate slowed to 3.4% in April. The Fed will continue to gauge the economic data points to decide on its future course of monetary policy. One of the most important inflation data releases this week is April’s Consumer price index (CPI), due on Wednesday, May 10. This will be followed by the Producer price index (PPI) on May 11.

On the earnings front, some of the major companies reporting this week include entertainment giant Walt Disney (DIS), travel & leisure company Airbnb (ABNB), digital payment platform PayPal Holdings (PYPL), Warren Buffett’s favorite oil stock Occidental Petroleum (OXY), Chinese e-commerce giant JD.com (JD), and auto companies Lucid Group (LCID) and Rivian (RIVN).

Elsewhere, most European indices are trading in the green today. Markets look forward to the Bank of England’s rate hike decision due on Thursday, following both the U.S. Fed and the European Central Bank’s 25 basis point rate hikes announced last week.  

Asia-Pacific Markets Mostly Up

Most Asia-Pacific indices ended the trading session higher today, except for Japan’s indices, as traders and officials fretted over the nation’s steadily growing inflation.  

Hong Kong’s Hang Seng, China’s Shanghai Composite, and Shenzhen Component indices ended the trading session up by 1.24%, 1.81%, and 0.68%, respectively. 

At the same time, the Nikkei and Topix indices ended the trading session down by 0.71% and 0.21%, respectively.

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