Last Updated 4:05 PM EST
Stock indices ended the day mixed after a volatile trading session. The Dow Jones Industrial Average gained 0.1%, while the S&P 500 and the Nasdaq 100 fell 0.12% and 0.4%, respectively. Nonetheless, all three indices finished near their intraday highs.
The technology sector (XLK) was the session’s laggard, as it lost 0.58%. Conversely, the materials sector (XLB) was the session’s leader, with a gain of 1.07%.
Furthermore, the U.S. 10-Year Treasury yield decreased to 3.49%, a decrease of more than one basis point. On the other hand, the Two-Year Treasury yield increased, as it hovers around 4.26%. This brings the spread between them to -77 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 33.8% compared to yesterday’s expectations of 27.9%.
In addition, the market is now also assigning a 10.8% probability to a range of 5.25% to 5.5%. For reference, investors had assigned a 7.4% chance yesterday.
Stock Indices are Mixed; Wage-Price Spiral Might be Forming
Last Updated at 3:00PM EST
Stocks are mixed heading into the final hour of Friday’s trading session. As of 3:00 p.m. EST, the Dow Jones Industrial Average is up 0.1%, while the S&P 500 and the Nasdaq 100 are down 0.1% and 0.5%, respectively.
Investors who may be on the lookout for a wage-price spiral may be concerned after the Bureau of Labor Statistics released its Average Hourly Earnings report, which measures the month-over-month change in wages.
A wage-price spiral is caused when the price of goods increases as a result of higher wages but also leads to workers demanding higher wages as a result of the higher prices. As a result, it creates a perpetual loop of price and wage increases.
A way investors can gauge the presence of a wage-price spiral is by comparing average hourly earnings to inflation. If earnings are higher than inflation, it could be a warning sign that the loop is beginning to form.
Wages grew 0.6% in November compared to the previous month, beating the forecast of 0.3%. However, the most recent consumer price index grew 0.4% month-over-month. When looking at the core consumer price index, the last reading was an increase of 0.3% month-over-month.
Although the most recent CPI numbers are from October, Economists’ forecasts for November’s inflation numbers paint a similar picture, as CPI is expected to be 0.3%.
Therefore, if economists are right, then investors might need to worry about the potential for a wage-price spiral.
Stock Indices are Red; Gasoline Prices Fall
Last Updated at 12:15PM EST
Stocks are in the red halfway into today’s trading session. As of 12:15 p.m. EST, the Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 are down 0.2%, 0.4%, and 0.8%, respectively.
In addition, WTI crude oil is lower today, as it hovers around the mid-$81 per barrel range. The commodity’s overall downtrend has caused prices at the pump to decline when compared to last week.
Indeed, the national average for regular gas was last $3.448 per gallon, down from last week’s reading of $3.578. This is significantly lower than the all-time high of $5.016 per gallon on June 14.
The highest prices can be found in Hawaii, where prices are substantially higher than the national average, at $5.186 per gallon. On the other hand, Texas is the state with the lowest gas prices, at $2.82 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.
Stocks Open in the Red after Jobs Report
First Published 8:42AM EST
U.S. stock indices tanked early on Friday after the publication of the much-anticipated November jobs report.
Indices like the Dow Jones Industrial Average (DJIA) lost 0.8%, while those on the S&P 500 (SPX) lost around 1%, as of 8.42 a.m. EST, Friday. Meanwhile, the Nasdaq 100 (NDX) was down 1.3%.
The job payrolls report came in today which indicated that while unemployment stayed constant at 3.7%, the U.S. economy added 263,000 jobs in the month of November.
After-hour morale was also low after shares of three big technology stocks plunged. Shares of Asana (NYSE:ASAN), Marvell (NASDAQ:MRVL), and Zscaler (NASDAQ:ZS) plunged more than 15%, 7%, and 11%, respectively after posting quarterly results.
At the end of the regular trading session Thursday, The S&P 500 and the Dow closed lower by 0.09% and 0.56%, respectively. On the other hand, the Nasdaq 100 gained 0.1%.
Several economic data came out yesterday, revealing mixed views on the economy. Month-over-month Core personal consumption expenditure data marginally surpassed expectations indicating healthy consumer spending. Meanwhile, the ISM Manufacturing Index declined more than expected, suggesting a slowdown in manufacturing sector output last month.
Looking at both data, market experts are expecting that the U.S. economy may manage a soft landing if this pace of slowdown is maintained without contracting personal expenditure much.
The Fed is expected to raise interest rates over December 13 and 14, but this time, by 50 basis points.
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