Market News

Stock Market Today – Market Carnage Continues; Nasdaq 100 Closes 3% Lower

Last Updated 4:00 PM EST

Stock indices finished today’s trading session in the red. The Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 fell 2.25%, 2.48%, and 3.37%, respectively.

The communications sector was the session’s laggard, as it fell 3.88%. Conversely, the energy sector was the session’s leader, with a loss of 0.55%. In addition, WTI crude oil fell as it hovers around the low-$76 range.

Furthermore, the U.S. 10-Year Treasury yield decreased to 3.45%, a decrease of more than three basis points. Alternatively, the Two-Year Treasury yield increased, as it hovers around 4.24%.

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 2.8% in the fourth quarter.

This is lower than its previous estimate of 3.2%, which can be attributed to recent data released from the U.S. Census Bureau, the U.S. Bureau of Labor Statistics, the U.S. Department of the Treasury’s Bureau of the Fiscal Service, and the Federal Reserve Board of Governors.

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 3:00PM EST

Stocks are in the red 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 down 2.1%, 2.2%, and 3%, respectively.

Earlier today, the Federal Reserve Bank of Philadelphia released its Manufacturing Index report, which measures the general business conditions in Philadelphia.

The report surveys approximately 250 manufacturers. A level above zero indicates improving conditions, while a number below zero indicates the opposite.

For December, the report came in at -13.8 compared to the forecast of -10, meaning that conditions worsened more than expected on a month-over-month basis. It’s worth mentioning that this is the fourth consecutive monthly decline and the sixth decline in the past seven months.

Last Updated 11:17AM EST

The market’s plunge continues to gain momentum as recession fears continue to grow. As of 11:17 a.m. EST, the Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 are down 2.2%, 2.5%, and 3.2%, respectively.

On Thursday, the Census Bureau released its month-over-month U.S. Retail Sales report, which measures the change in the total value of retail sales. In November, retail sales decreased by -0.6%, well below the expected decrease of 0.1%.

This was primarily because consumers were spending more on essentials such as food and healthcare and less on discretionary items such as electronics.

In addition, Core Retail Sales, which excludes automobiles, also fell month-over-month by -0.2%, which is below the 0.2% gain that was forecast. In addition, when also excluding gasoline, core retail spending fell by -0.2%.

This demonstrates how inflation is impacting consumers. As products and services continue to become more expensive, people have less money available to allocate to non-essential items.

What’s particularly concerning is that these numbers are not adjusted for inflation and come during the start of the busy holiday season. Nevertheless, November’s results equate to the largest decline in retail spending in almost a year.

Stocks Plunge as Investors Digest Fed Next Moves

Last updated 9:55AM EST

Markets were down at open on Thursday morning following the Federal Reserve’s latest interest rate hike. Powell’s hawkish comments kept traders concerned.

The Dow Jones Industrial Average (DJIA) lost 1.7%, while the S&P 500 (SPX) dropped 1.7%, as of 9:55 a.m. EST, Thursday. Meanwhile, the Nasdaq 100 (NDX) retreated 1.9%.

The jobless claims data on Thursday was encouraging even as the U.S. economy is slowing down. The number of jobless claims in early December fell to 211,000 – a three-month low. These claims for unemployment benefits declined by 20,000 from 231,000 in the prior week.

Wall Street economists were expecting seasonally adjusted claims of 232,000 in the week ending December 10.

Last updated 8:40AM EST

Stock futures were down early Thursday morning following the Federal Reserve’s latest interest rate hike. Powell’s hawkish comments kept traders concerned.

Futures on the Dow Jones Industrial Average (DJIA) lost 0.9%, while those on the S&P 500 (SPX) lost 1.2%, as of 8:40 a.m. EST, Thursday. Meanwhile, the Nasdaq 100 (NDX) futures retreated 1.50%.

The Federal Reserve announced a 50 basis-point interest rate hike on Wednesday, a welcome slowdown from the previous four consecutive 75 basis-point raises. This brings the interest rates within the targeted range of 4.25% to 4.5%, the highest in 15 years.

However, during his speech, Fed Chair Jerome Powell indicated that the fight against inflation is far from over. The labor market is still robust, which is good news for the public but not for the economy. The Fed is expected to continue to keep the economy in a high-interest-rate environment until the labor market slows down desirably.

The aggressive monetary policy adopted by the Fed this year is finally showing results as prices cooled for the second consecutive month. It is possible that the Fed might increase interest rates at a steady pace of 50 basis points for a month or two more. However, this slowing pace should not be an indicator that the Fed is about to adopt a reversal path. A slower pace will only help the central bank analyze the economic data that comes in during this time, and gauge whether a tighter policy should be implemented again to make it more restrictive.

It is clear that the interest rates are expected to remain high in the coming year and it is still a long journey to the target inflation rate of 2%-3%. Politicians and business leaders have been priming the public for a possible recession in 2023 with their comments, and Fed leaders have at no point hinted at an economic upcycle yet. It is safe to say that the fear of a recession continues to tighten its grip on the market.

In regular trading, the Dow fell 0.42%, while the S&P 500 dipped 0.61% and the Nasdaq 100 dropped 0.79%, in response to the Federal Reserve’s policy decision.

On the economic front, November’s retail sales data will be out on Thursday, giving us more insights into consumer spending patterns. Additionally, last week’s jobless claims will also be out. Investors keep an eye on the weekly jobless claims to understand the direction of the labor market.

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