Last Updated 4:00 PM EST
Pick the best stocks and maximize your portfolio:
- Discover top-rated stocks from highly ranked analysts with Analyst Top Stocks!
- Easily identify outperforming stocks and invest smarter with Top Smart Score Stocks
Stock indices finished today’s choppy trading session relatively unchanged. The Dow Jones Industrial Average and the S&P 500 gained 0.28% and 0.11%, respectively. On the other hand, the Nasdaq 100 fell 0.11%. The consumer discretionary sector was the session’s laggard, as it fell 1.17%. Conversely, the energy sector was the session’s leader, with a gain of 1.55%.
Furthermore, the U.S. 10-Year Treasury yield increased to 3.69%, an increase of more than 10 basis points. Similarly, the Two-Year Treasury yield also increased, as it hovers around 4.27%.
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 2.7% in the fourth quarter.
This is lower than its previous estimate of 2.8%, which can be attributed to this morning’s housing starts report.
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.
Indices Cut Earlier Losses, Turn Slightly Positive
Last Updated 2:23PM EST
Stock indices have cut their earlier losses to turn slightly positive halfway through today’s trading session. As of 2:23 a.m. EST, the Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 are up 0.5%, 0.4%, and 0.1%, respectively.
The Census Bureau released its U.S. Housing Starts report today, which measures the change in new residential buildings that began construction in the reported month on an annualized basis.
In November, housing starts came in at 1.427 million versus expectations of 1.4 million. On a month-over-month basis, housing starts fell by -0.5%. This follows a -2.1% drop in last month’s report.
However, U.S. Building Permits missed expectations, with a print of 1.342 million compared to the forecast of 1.485 million. This was a significant decrease from the prior month’s report, which came in at 1.512 million, equating to a decrease of -11.2% month-over-month. It’s worth noting that building permits are on an overall decline which began in March.
These declines are likely to continue as home builder sentiment falls due to higher building and financing costs. Indeed, the U.S. NAHB Housing Market Index, which was released yesterday and measures home builder sentiment, continues to fall each month.
Markets Open in the Red as Recession Worries Surface
Last updated: 9:52AM EST
Stock markets opened in the red on Tuesday morning as the Dow Jones Industrial Average (DJIA) lost 0.3%, while the S&P 500 (SPX) was down by 0.5%, as of 9:52 a.m. EST, Tuesday. Meanwhile, the Nasdaq 100 (NDX) declined 0.6%.
First published: 7:27AM EST
Stock futures were mixed early Tuesday morning, after Japan’s central bank announced a wider cap on its 10-year bond yield, baffling investors.
Futures on the Dow Jones Industrial Average (DJIA) gained 0.15%, while those on the S&P 500 (SPX) inched up 0.02%, as of 7 a.m. EST, Tuesday. Meanwhile, the Nasdaq 100 (NDX) futures dipped 0.19%.
On Monday, the S&P 500, the Dow, and the Nasdaq 100 shed 0.9%, 0.49%, and 1.42%, respectively, after wavering throughout the day. The markets opened on a lower note before rallying in the afternoon. However, by the evening, the market had shed momentum, ending lower than it began.
Global markets were taken by surprise after the Bank of Japan widened its cap on 10-year government bond yields in order to buffer the economy against the detrimental effects of monetary stimulus moves. The Japanese central bank’s move comes a week after the European Central Bank as well as the Federal Reserve raised their interest rates and hinted at more hikes.
The hawkishness across the world, with 90% of central banks tightening their monetary policies, is increasing the chances of a global recession in 2023.
The U.S. stock market appears to be on track to end the year in the red. The dimming possibilities of a year-end rally or ‘Santa Claus’ rally are making investors anticipate a weak entry into the new year.
A big upward movement in stock prices is not expected for the remainder of the year. As long as the high inflation and high-interest rate environment persists, investors of U.S. stocks are likely to remain focused on updates from the Fed. However, the next Fed update is not likely to come in before February next year.
On the economic front, November’s housing starts data is due Tuesday morning. Moreover, existing home sales data and new homes report are set to be released Wednesday and Friday, respectively.
Interested in more economic insights? Tune in to our LIVE webinar.
