Last Updated 4:05 PM EST
Stock indices finished today’s trading session in the green. The Dow Jones Industrial Average (DJIA), the S&P 500 (SPX), and the Nasdaq 100 (NDX) gained 0.61%, 1.1%, and 2%, respectively.
The consumer staples sector (XLP) was the session’s laggard, as it lost 0.34%. Conversely, the energy sector (XLE) was the session’s leader, with a gain of 3.14%.
Furthermore, the U.S. 10-Year Treasury yield increased to 3.5%. Similarly, the Two-Year Treasury yield also increased, as it hovers around 4.19%. This brings the spread between them to -69 basis points.
Compared to yesterday, the market is pricing in a higher chance of a higher Fed Funds rate for June 2023. In fact, the market’s expectations for a rate in the range of 5% to 5.25% increased to 36.1% compared to yesterday’s expectations of 32.1%.
In addition, the market is now also assigning a 7.9% probability to a range of 4.5% to 4.75%. For reference, investors had assigned an 11.2% chance yesterday.
Last Updated 2:40PM EST
Stock indices are in the green heading into the later stages of this afternoon’s trading session. As of 2:40 p.m. EST, the Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 are up 0.4%, 0.8%, and 1.5%, respectively.
Earlier today, the Census Bureau released its U.S. Core Durable Goods Orders report for the month of November, which measures the change in order value for long-lasting big-ticket items. This report excludes the impact of aircraft orders because they tend to be very volatile. Therefore, it is generally agreed upon that the core reading provides a better gauge of ordering trends.
For the month of December, Core Durable Goods Orders fell by -0.1%, which was better than the expected -0.2% on a month-over-month basis. This was slightly worse than the previous month. However, when including aircraft orders, growth was 5.6%, which beat expectations of 2.5%.
Nevertheless, it is important to remember that this is a lagging indicator, meaning that the current demand has the potential to be lower as inflation and higher interest rates continue to impact people’s purchasing power.
Last Updated 1:44PM EST
Stocks recover from earlier weakness to rally near session highs. As of 1:44 p.m. EST, the Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 are up 0.4%, 0.7%, and 1.3%, respectively.
Last Updated 11:10AM EST
Stocks have given up their early gains in the later moments of this morning’s trading session. As of 11:20 a.m. EST, the S&P 500 and the Nasdaq 100 are up 0.1% and 0.6%, respectively. Meanwhile, the Dow Jones Industrial Average is down 0.2%.
On Thursday, the Census Bureau released its United States New Home Sales data for December, which came in at 616,000. For reference, forecasters were expecting a print of 617,000. However, this was significantly lower than last year’s figure of 839,000. The New Home Sales metric measures the number of single-family homes sold in the prior month (on an annualized basis).
To make matters worse for sellers, the supply of homes ticked up to 9 months in December compared to November’s supply of 8.9 months. In addition, the median sale price of a home fell substantially month-over-month, going from $471,200 in November to $442,100 in December.
The reduced activity from buyers can be attributable to higher interest rates, which have made mortgage payments more expensive and more difficult to qualify for.
Last updated: 9:31 AM EST
Stocks indices climbed higher on Thursday morning, buoyed by key economic data and earnings.
U.S. GDP in Q4 came in stronger-than-expected, rising by 2.9% on an annualized basis versus estimates of 2.7%. GDP had increased by 3.2% at the end of Q3.
Moreover, initial jobless claims in the week ending January 21 fell to their lowest level since last April to 186,000 versus a median forecast of 205,000. Consumer spending increased by 2.1% for the fourth quarter, a slight decline from 2.3% in the previous period.
A measure of inflation, the personal consumption expenditures (PCE) price index increased by 3.2% in Q4, in line with expectations but down sharply from 4.8% in the third quarter.
The Nasdaq 100 (NDX) was up 1.3%, while the S&P 500 (SPX) rose 0.7%. Meanwhile, the Dow Jones Industrial Average (DJIA) increased 0.3% as of 9:31 am EST on Thursday, January 26.
First published: 5:58AM EST
Stock futures trended higher early Thursday morning as investors continued to watch key corporate earnings to assess the direction of the economy.
Futures on the tech-heavy Nasdaq 100 (NDX) were up 0.57%, while those tied to the S&P 500 (SPX) rose 0.22%. Meanwhile, futures on the Dow Jones Industrial Average (DJIA) were up 0.04% as of 5.58 am EST on Thursday, January 26.
On Wednesday, the S&P 500 and the Nasdaq 100 fell 0.02% and 0.27%, respectively. Meanwhile, the Dow Jones Industrial Average was up 0.03%. Stock indices made a solid comeback from the intraday lows on Wednesday.
Tesla (TSLA) stock rallied in Thursday’s pre-market as the Elon Musk-led electric vehicles maker reported upbeat Q4 results after the markets closed on Wednesday. Levi Strauss (LEVI) stock also rallied on better-than-anticipated results and outlook. Meanwhile, IBM’s (IBM) earnings were in line with analysts’ expectations while revenue topped forecasts. IBM announced headcount reduction of 3,900 employees, joining the other tech giants in their layoff spree.
Meanwhile, Southwest Airlines (LUV), American Airlines (AAL), Jetblue (JBLU), and Alaska Air (ALK) are scheduled to report their earnings on Thursday. The results of these major airlines and their outlook will provide key insights into consumers’ spending behavior amid the ongoing macro uncertainty.
According to Reuters, of the 95 S&P 500 companies that have reported results, 67% have exceeded Wall Street’s consensus estimates. This figure is quite below the average beat rate of 76% over the past four quarters. Analysts now expect overall S&P 500 earnings to decline 3% year-over-year, which is nearly double the 1.6% decline estimated at the beginning of this year.
Coming to key economic releases, initial jobless claims for the week ended January 21, advance estimates of real gross domestic product, durable goods orders, and new home sales are slated to be announced today. These economic numbers will throw more light on whether the Fed’s aggressive rate hikes have fetched the desired results or not.
Mixed Trends in Asia-Pacific Markets
On Thursday, Hong Kong’s Hang Seng index approached its 11-month high as markets reopened after the Lunar New Year Holiday. The Hang Sang Index was up 2.4% at market close, fueled by holiday spending data and tourism numbers that indicated a recovery in Hong Kong and Mainland China. Specifically, Mainland China’s Shanghai Composite and the Shenzhen Component were up 0.76% and 0.56%, respectively, at closing.
Meanwhile, in Japan, the Nikkei 225 and the Topix were both down 0.12% on Thursday. Additionally, Australia’s S&P/ASX 200 was down 0.30% at market close as investors continued to worry about elevated inflation levels.
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