Last Updated 4:02 PM EST
Stock indices finished today’s trading session in positive territory. The Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 climbed 1.07%, 1.63%, and 2.1%, respectively.
The energy sector was the session’s laggard, as it gained 0.1%. Conversely, the real estate sector was the session’s leader, with a gain of 3.95%.
Furthermore, the U.S. 10-Year Treasury yield fell to 4.08%, a decrease of more than 16 basis points. Similarly, the Two-Year Treasury yield also decreased, as it hovers around 4.48%. This brings the spread between them to -40 basis points. The negative spread indicates that investors still have fears of a recession.
Compared to yesterday, the market is pricing in a higher chance of a lower Fed Funds rate for the end of the year. In fact, the market’s expectations for a rate in the range of 4.25% to 4.5% increased to 47.5%, which is up from yesterday’s expectations of 43.2%.
In addition, the market is now also assigning a 50.5% probability to a range of 4.5% to 4.75%. For reference, investors had assigned a 54.9% chance yesterday.
Stocks Rally into the Close
Last Updated at 3:00PM EST
Stocks are in the green heading into the final hour of today’s trading session. As of 3:00 p.m. EST, the Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 are up 0.9%, 1.3%, and 1.7%, respectively.
In addition, WTI crude oil is relatively flat, as it hovers around the high-$84 per barrel range. Oil’s recent weakness has caused prices at the pump to decline when compared to last week.
Indeed, the national average for regular gas was last $3.775 per gallon, down from last week’s reading of $3.87. This is significantly lower than the all-time high of $5.016 per gallon on June 14.
The highest prices can be found in California, where prices are substantially higher than the national average, at $5.713 per gallon. On the other hand, Georgia is the state with the lowest gas prices, at $3.193 per gallon.
It’ll be interesting to see if this downward trend will continue going forward as the Federal Reserve looks to raise interest rates to fight inflation while oil producers lower production in order to maintain the price.
Stocks are Positive; House Prices Fall Month-over-Month
Last Updated at 12:00PM EST
Equity markets are in the green halfway into Tuesday’s trading session. As of 12:00 p.m. EST, the Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 are up 0.8%, 1.3%, and 1.8%, respectively.
The energy sector (XLE) is the laggard so far, as it is down 0.2%. Conversely, the real estate sector (XLRE) is the session’s leader, with a gain of 3.1%.
Standard & Poor’s released its United States S&P/Case-Shiller House Price Index Composite – 20 n.s.a. today. This report measures the change in house prices in 20 metropolitan areas.
On a year-over-year basis, home prices increased 13.1% in August, lower than the expected 14.4%. This is lower than last month’s reading of 16%. However, prices decreased -1.6% on a month-over-month basis, missing expectations of a -0.7% decline. This is on top of the previous month’s report of a -0.8% drop.
However, it’s important for investors to remember that this report is for August, meaning that there is quite a substantial lag in the data. It is possible that the current picture is actually worse as the cost of financing a home continues to rise while purchasing power falls.
Stocks Rise as Consumer Confidence Falls; Inflation Hits Halloween Candy
Last Updated at 10:15AM EST
Stock Indices are in the green to start today’s trading session. As of 10:15 a.m. EST, the Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 are up 0.4%, 0.9%, and 1.5%, respectively.
On Tuesday, the Conference Board released its Consumer Confidence report, which, as the name suggests, measures the consumers’ confidence in the economy. This report is believed to be a leading indicator for spending patterns, as optimistic consumers are more likely to spend as opposed to pessimistic ones.
For October, consumer confidence came in at 102.5, which was worse than expectations of 106.5. This breaks a two-month winning streak that saw consecutive increases during August and September.
It’s worth noting that consumer confidence has been on an overall downtrend since its post-pandemic peak of 128.9 in June 2021. Compared to October 2021, sentiment declined by 8.2% on a year-over-year basis.
Undoubtedly, inflation has been playing a major role in the declining sentiment. If things weren’t expensive enough, the prices of Halloween candy have surged more than 13% compared to last year. This increase can be attributed to increasing labor, flour, and sugar costs.
Futures Dip as Blue-Chip Giants Prepare to Report Earnings Results
First Published at 7:21AM EST
Stock futures moved lower early Tuesday morning as some of the largest technology names prepare to release earnings results. The third-quarter performances and guidance are being closely followed by investors to understand the health of the economy.
Futures on the Dow Jones Industrial Average (DJIA) dipped 0.45% , while those on the S&P 500 (SPX) lost 0.35%, as of 7.05 a.m. EST, Tuesday. Meanwhile, the Nasdaq 100 (NDX) futures retracted 0.12%.
Alphabet (NASDAQ:GOOGL) and Microsoft (NASDAQ:MSFT) are slated to release their Q3 earnings on Tuesday. Wednesday will see Meta Platforms (NASDAQ:META) on the earnings stage whereas Amazon (NASDAQ:AMZN) and Apple (NASDAQ:AAPL) will report on Thursday. Results from these mega-cap blue-chips are expected to be major market movers this week.
The market had a positive day on Monday, and the indexes ended the day in the green. The S&P 500, the Dow, and the Nasdaq 100 had gained 1.19%, 1.34%, and 1.06% by Monday’s closing bell.
After a good day for stocks came the news of Amazon’s hiring freeze and Discover Financial’s (NYSE:DFS) disappointing earnings results, leading to a slight dip in each of their share prices.
However, as we move into the thick of the earnings season, most of the companies that have reported so far have not been huge disappointments. This is partly because of their efforts to navigate through the headwinds, and partly because of the reduced prior expectations of analysts.
Others on the earnings roster on Tuesday are United Parcel (NYSE:UPS), General Electric (NYSE:GE), Coca-Cola (NYSE:KO), and General Motors (NYSE:GM) for before the bell; and Chipotle Mexican Grill (NYSE:CMG) and Texas Instruments (NASDAQ:TXN) for after the market closes.
Coming to key economic data, S&P/Case-Shiller August home prices as well as the FHFA August home prices are due to be released on Tuesday, showing us how the housing market had fared in August and what is expected of the sector. Additionally, October’s consumer confidence data is also slated to be released later on Tuesday giving us more insights into how consumers are handling the pressures of inflation.
Chinese Politics and U.S. Stocks
Earlier this week, China’s President Xi Jinping was reelected for his third term as the General Secretary of Communist Party, following which Chinese stocks like Alibaba (NYSE:BABA) and Nio (NASDAQ:NIO) plunged significantly.
This plunge was due to President Xi’s notoriously tight policies on big businesses which will now hang heavy on the companies for some more time. Moreover, continued strict zero-COVID policy is also expected to hurt trade. These are likely to be bad news for Chinese stocks listed in the U.S., as well as stocks like Tesla (NASDAQ:TSLA) that are trying to gain market share in China.
Sectors to Remain Under Pressure as Russia-Ukraine Hopelessly Continues
Meanwhile, U.S. President Joe Biden is sitting on the hot seat as the world’s largest economy battles inflation, recession, as well as the pressure to aid Ukraine while being careful to not attract the wrath of Russia. With the mid-term elections looming, the Biden administration is under pressure to stop worrying about Ukraine and tackle the issues back home first.
Amid these undercurrents, energy, fertilizer, and wheat stocks are likely to keep being volatile until there is any meaningful dialogue between the two warring countries, which is unlikely to happen any time soon (at least until the mid-terms).
