Last Updated 4:05PM 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 1.4%, 1.79%, and 1,73%, respectively. The energy sector was the session’s laggard, as it fell by 3%. Conversely, the utilities sector was the session’s leader, with a loss of 0.59%. This can be attributed to fears that the Federal Reserve will continue raising interest rates.
Furthermore, the U.S. 10-Year Treasury yield increased to 3.59%, an increase of 10 basis points. On the other hand, the Two-Year Treasury yield is higher than yesterday’s close, as it hovers around 4.4%. This brings the spread between them to -81 basis points.
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 October, new orders increased by 1%, much better than the expected 0.7%.
It’s worth noting that this indicator is based on data from October, making it a lagging indicator. Indeed, the Institute for Supply Management released its Manufacturing New Orders Index last week for November, which showed a decline. Therefore, the U.S. Census Bureau’s Factory Orders report next month might also come in negative.
Stocks Nosedive Towards the Finish Line
Last Updated 3.30PM EST
Stock indices are still in the red to open the week in Monday trading. As of 3.30 p.m. EST, the Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 are down 1.5%, 1.9%, and 2.1%, respectively.
Indices Struggle, Nasdaq Down 2%
Last Updated at 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 1.6%, 2%, and 2%, respectively.
In addition, WTI crude oil is lower today, as it hovers around the high-$76 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 $3.403 per gallon, down from last week’s reading of $3.546. 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 $5.177 per gallon. On the other hand, Texas is the state with the lowest gas prices, at $2.783 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 while oil producers lower production in order to maintain the price.
Indices Deepen Their Losses after Sluggish Start
Last Updated 12:00PM EST
Stock indices fall deeper into the red halfway into today’s trading session. As of 12:00 p.m. EST, the Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 are down 1.2%, 1.5%, and 1.3%, respectively.
On Monday, 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 56.5, better than the expected 53.3 and higher than last month’s reading of 54.4.
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.
In addition, the ISM Non-Manufacturing Employment report came in at 51.5, slightly higher than last month’s reading of 49.1. This indicates that employment saw a slight boost following a slight contraction.
Stocks Fall over Larger-than-Expected Interest Rate Hike Possibility
Last Updated 10:30AM EST
U.S. stock indices fell in early Monday trading as investors look ahead to a relatively quiet week of mulling over the possibility of a larger-than-expected interest rate hike prompted by a wage uptick.
Last week, the major averages ended the second straight week in the green, with the S&P 500, the Dow, and the Nasdaq Composite ending 1.1%, 0.2%, and 2.1%, respectively.
A series of speeches by several Federal Reserve leaders ended with Fed Chair Jerome Powell’s speech last week, hinting at a slower pace of interest rate hikes hereon. The central bank is expected to raise the short-term borrowing rates by at least 50 basis points in its next meeting on December 13-14, after four consecutive 75 basis-point appraisals.
However, the fear of a Fed-induced recession still looms large. The interest rates are likely to keep rising throughout 2023 and into 2024, as indicated by Fed leader John Williams recently.
Experts are concerned about the labor market, which still refuses to buckle under the pressure of the tightening campaign. On Friday, the November jobs report revealed that nonfarm payrolls added to the private sector increased to 263,000 instead of the widely estimated number of 200,000 while the unemployment level remained steady at 3.7%. Additionally, wages increased by 0.6% for November.
This takes any chance of a pause or pivot off the table in the near future, as that would mean risking wage inflation and possible stagflation because the output from the rest of the sectors is slowing down.
Meanwhile, oil prices are on the rise again as the sanctions on Russian crude by the West kick in.