Last Updated 4:04 PM EST
Stock indices finished today’s trading session mostly lower. The S&P 500 and the Nasdaq 100 fell 0.59% and 1.88%, respectively. However, the Dow Jones Industrial Average gained 0.62%
Furthermore, the U.S. 10-Year Treasury yield fell to 3.93%, a decrease of more than seven basis points. However, the Three-Month Treasury yield increased, as it hovers around 4.05%. This brings the spread between them to -12 basis points.
Compared to yesterday, the market is pricing in a higher chance of a higher 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% decreased to 55.1%, which is down from yesterday’s expectations of 59.8%.
In addition, the market is now also assigning a 37.7% probability to a range of 4.5% to 4.75%. For reference, investors had assigned a 35.6% chance yesterday.
Indices are Mixed; Core Durable Goods Miss Expectations
Last Updated 3:00PM EST
Stocks remain mixed heading into the final hour of today’s trading session. As of 3:00 p.m. EST, the S&P 500 and the Nasdaq 100 are down 0.5% and 1.8%, respectively. Meanwhile, the Dow Jones Industrial Average is up 0.9%
On Thursday, the Census Bureau released its U.S. Core Durable Goods Orders report for the month of September, 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 September, Core Durable Goods Orders fell by -0.5%, which was worse than the expected growth of 0.2% on a month-over-month basis. This breaks a six-month-long growth streak, suggesting that demand is starting to wane.
However, when including transportation items, growth remained positive at 0.4%, although this also missed expectations of 0.6%.
Nevertheless, it is important to remember that this is a lagging indicator, meaning that the current demand has the potential to be much lower as inflation continues to impact people’s purchasing power.
Indices are Mixed; Initial Jobless Claims Beat Expectations
Last Updated 12:00PM EST
Stock indices are mixed halfway into today’s trading session. As of 12:00 p.m. EST, the S&P 500 and the Nasdaq 100 are down 0.1% and 1.3%, respectively. Meanwhile, the Dow Jones Industrial Average is up 1.1%
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 219,000, up from last week’s reading of 212,250. It’s worth noting that this figure has been on an 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 1.438 million. This was above the forecast of 1.388 million and higher than last week’s print of 1.383 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.
Indices are Mixed Even as GDP Tops Expectations
Last updated 9:56AM EST
The Dow Jones Industrial Average (DJIA) jumped around 300 points, up 0.9%, after the GDP data topped expectations. The S&P 500 (SPX), however, declined 0.2%, as of 9:56 a.m. EST, Thursday. Meanwhile, the tech-heavy Nasdaq 100 (NDX) shed more than 100 points, down by 1% as it was weighed down by Meta Platforms (META) disappointing Q3 earnings and a bleak Q4 forecast.
Last updated: 8:45AM EST
The U.S. Department of Labour released its jobless claims report today and seasonally adjusted initial claims were 217,000, up by 3,000 from the previous week but still below forecasts of 220,000.
Reassuringly, U.S. GDP grew at 2.6% in Q3, rebounding from two straight declines in the first half of the year, beating forecasts of growth of 2.3%.
The Dow Jones Industrial Average (DJIA) was up 0.9%, while the S&P 500 (SPX) grew 0.3%, as of 8.57 a.m. EST, Thursday. Meanwhile, the Nasdaq 100 (NDX) was down 0.3%.
First update 7:11AM EST
Stock futures were mixed early on Thursday morning as investors gauged the dismal quarterly results from Meta Platforms (NASDAQ:META) and Credit Suisse (NYSE:CS) as well as an earnings beat from ServiceNow (NYSE:NOW).
Futures on the Dow Jones Industrial Average (DJIA) gained 0.46%, while those on the S&P 500 (SPX) lost 0.05%, as of 6.55 a.m. EST, Thursday. Meanwhile, the Nasdaq 100 (NDX) futures retracted 0.60%.
Needless to say, Meta, Credit Suisse, and ServiceNow are largely influencing the pre-market traders’ sentiments. Meta and Credit Suisse are down almost 20% and 11%, respectively, whereas ServiceNow is up 12% in the pre-market hours.
During Wednesday’s regular trading session, market energy was tense after Alphabet’s (NASDAQ:GOOGL)(NASDAQ:GOOG) disappointing earnings print and Microsoft’s weak guidance. Investor confidence in tech stocks was visibly shaken, and the tech-heavy Nasdaq 100 index closed the day with a 2.26% loss. Meanwhile, the Dow ended slightly higher whereas the S&P 500 lost 0.74%.
Investors are getting increasingly uncomfortable with the uncertainty in the market as company earnings are giving them as many reasons to worry as to celebrate. Several companies are posting earnings and revenue beats, but their outlooks are conservative or weak. On the other hand, some earnings misses are being accompanied by strong guidance. This is making it difficult for investors to understand how to react rationally, thus indulging in emotional investing. This is keeping the markets volatile.
For instance, Visa (NYSE:V) surpassed Wall Street’s expectations in its earnings results yesterday. However, its guidance seemed to exclude the possibility of a recession, according to some experts. This kept skeptics at bay.
However, market players are fervently following the earnings results mostly for the guidance and forward-looking trends, rather than the actual third-quarter results. This is because investors are still struggling to find ground and stop the roller coaster, and guidance gives some direction to their expectations.
More big tech earnings are on deck, with Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL), and Intel (NASDAQ:INTC) slated for release on Thursday.
Meanwhile, the economy is preparing for another possible 75 basis-point interest rate hike at next week’s FOMC meeting, followed by the midterm elections a few days later. Markets are expected to remain volatile for the next two weeks now, even though by now the thread of hope of a Federal Reserve pivot has thinned.
Also, the Bureau of Economic Analysis (BEA) is expected to announce the U.S.’ third-quarter GDP (gross domestic product) growth reading, giving investors a look into whether the economy expanded or shrank in Q3. Several analysts are positive ahead of the reading and expect the economy to break out of its two-quarter streak of negative growth.
Moreover, the Chinese stock markets are rebounding after ebbing earlier this week. This brings hope for Chinese stocks like Alibaba (NYSE:BABA), JD.com (NASDAQ:JD), etc.
