Stock Market Today: Stocks Finish Lower; GDPNow Estimate Increases

Last Updated 4:02 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 0.46%, 1.06%, and 1.98%, respectively.

The technology sector was the session’s laggard, as it fell 2.96%. Conversely, the energy sector was the session’s leader, with a gain of 1.85%. In addition, WTI crude oil remained below $90 per barrel as it hovers around the low-$88 range.

Furthermore, the U.S. 10-Year Treasury yield increased to 4.14%, an increase of more than three basis points. Similarly, the Two-Year Treasury yield also increased, as it hovers around 4.71%.

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 3.6% in the fourth quarter.

This is higher than its previous estimate of 2.6%, which can be attributed to recent data released from the U.S. Census Bureau, the U.S. Bureau of Economic Analysis, and the Institute for Supply Management.

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.

Stocks are Down Heading into the Close

Last Updated 2:30PM EST

Stocks are in the red heading into the final 90 minutes of today’s trading session. As of 2:30 p.m. EST, the Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 are down 0.03%, 0.4%, and 1.1%, respectively.

Earlier today, the U.S. Census Bureau released its monthly report for U.S. Factory Orders, which measures the month-over-month change in new orders placed with manufacturers. In September, new orders increased by 0.3%, in line with expectations.

In addition, when excluding the transportation industry from factory orders, the month-over-month change actually declined by 0.1%.

It’s worth noting that these indicators are based on data from September, making them lagging indicators.

Indeed, the Institute for Supply Management released its Manufacturing New Orders Index earlier this week for October. The report came in at 49.2, which indicates a contraction. Therefore, the U.S. Census Bureau’s Factory Orders report next month might also see a contraction.

Stocks are Down; ISM Non-Manufacturing PMI Misses Expectations

Last Updated 12:09PM EST

Equity markets are in the red halfway into today’s trading session. As of 12:09 p.m. EST, the Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 are down 0.2, 0.7%, and 1.4%, respectively.

On Thursday, the Institute for Supply Management released its monthly report for the ISM Non-Manufacturing Purchasing Managers’ Index, which measures the overall economic condition of the non-manufacturing sector.

A number over 50 represents an expansion, whereas anything below 50 signals a contraction. The report came in at 54.4, worse than the expected 55.5 and lower than last month’s reading of 56.7.

It’s worth noting that this indicator has been in an overall downtrend since peaking in December 2021, when it hit a high of 69.1. If this trend continues, it might not take long before the non-manufacturing sector enters into contraction.

Indeed, the ISM Non-Manufacturing Employment report came in at 49.1, indicating that the number of jobs is contracting.

Stocks Fall; Initial Jobless Claims Beat Expectations

Last Updated 10:00AM EST

Stock Indices are in the red to start today’s trading session. As of 10:00 a.m. EST, the Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 are down 1.3%, 1.6%, and 2%, respectively. On Thursday, the Department of Labor released its Initial Jobless Claims report, which came in better than expected. In the past week, 217,000 people filed for unemployment insurance for the first time. Expectations were for 220,000 individuals.

When using the four-week average, initial jobless claims were 218,750, down from last week’s reading of 219,250. It’s worth noting that this figure has been in an overall uptrend since the end of September.

In addition, Continuing Jobless Claims, which measures the number of unemployed people who qualify for unemployment insurance, came in at 1.485 million. This was above the forecast of 1.45 million and higher than last week’s print of 1.438 million.

Continuing Jobless Claims are currently sitting near their lowest levels since 1970. Relatively speaking, this suggests that individuals aren’t struggling to find other jobs after being laid off.

However, it’ll be interesting to see what will happen going forward as the Federal Reserve’s tightening policy slowly begins taking effect.

Futures Dip as Market Reels from Hawkish Fed

First Published 6:45AM EST

Stock futures were slightly below parity early Thursday morning as traders digested another 0.75% interest rate hike and processed the Fed’s mostly hawkish tone.

Futures on the Dow Jones Industrial Average (DJIA) lost 0.40%, while those on the S&P 500 (SPX) lost 0.53% as of 6.30 a.m. EST, Thursday. Meanwhile, the Nasdaq 100 (NDX) futures retracted 0.73%.

Another Day, Another Interest Rate Hike

Unsurprisingly, the Federal Reserve appraised the short-term borrowing rates by 75 basis points on Wednesday and took any chance of a pivot off the table. Although October’s consumer price index data is still a week away, inflation is still expected to be hovering around 8%, which is much higher than the Fed’s target rate of 2%-3%. This means more interest rate hikes are required to start having the desired effects on the economy.

Fed Chair Jerome Powell did, however, indicate that the central bank may discuss a step-down in its policy.

The central bank is also awaiting the total nonfarm payrolls number for October, which will be released on Friday. This data will be accompanied by the monthly unemployment rate. These records will help set the tone for the next interest rate hike decision. However, going by the incoming data on other aspects of the labor market, the job market still appears to be tighter than desired, which might be a cue for the Fed to keep increasing interest rates.

After initial gains, stocks fell on Thursday after the Fed’s announcement, upon fresh concerns about where the economy is heading. Powell clarified that several data points since the last Fed meeting “suggests that the ultimate level of interest rates will be higher than previously expected,” sending a wave of panic among investors.

It is safe to say that the economy is bracing itself for a recession in the next few months, induced by relentless inflation, increasing interest rates, global supply-chain issues, and rising commodity prices due to geopolitical tensions. Markets are expected to remain volatile till a few months of consistent cooling in inflation is seen, and the Fed eases its crackdown.

Tech Earnings Disappoint

The S&P 500, the Dow, and the Nasdaq 100 plunged 2.5%, 1.55%, and 3.39%, respectively, at the end of the regular trading session Wednesday.

Sentiments were also affected by disappointing quarterly results and weak guidance by Qualcomm (NASDAQ:QCOM), Roku (NASDAQ:ROKU), and Fortinet (NASDAQ:FTNT).

Disclosure