Last Updated 4:05 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 0.91%, 0.74%, and 0.64%, respectively. The energy sector was the session’s laggard, as it fell 2.41%. Conversely, the communications sector was the session’s leader, with a gain of 0.3%.
Furthermore, the U.S. 10-Year Treasury yield increased to 3.58%, an increase of more than 10 basis points. Similarly, the Two-Year Treasury yield also increased, as it hovers around 4.34%.
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 3.2% in the fourth quarter.
This is lower than its previous estimate of 3.4%, which can be attributed to recent data released from the U.S. Census Bureau and the U.S. Bureau of Labor Statistics.
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 Give Up Gains
Last Updated 2:25PM EST
Stocks give up earlier gains as trading has been choppy in today’s session. As of 2:25 p.m. EST, the Dow Jones Industrial Average and the S&P 500 are down 0.3% and 0.1%, respectively. On the other hand, the Nasdaq 100 is up 0.2%.
Stocks Rise Along with Treasury Yields
Last Updated 12:00PM EST
Stock indices are in the green 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 up 0.1%, 0.3%, and 0.5%, respectively.
The energy sector (XLE) is the laggard so far, as it is down 0.5%. Conversely, the communications sector (XLC) is the session’s leader, with a gain of 1.2%.
Meanwhile, bond yields are higher, as the U.S. 10-Year Treasury yield is now hovering around 3.55%. This represents an increase of more than six basis points from the previous close.
Similar movements can be seen with the Three-Month yield, which is now at 4.29%. As a result, the spread between the 10-Year and Three-Month U.S. Treasury yields is still negative, as it currently sits at -74 basis points.
Indices Cut Losses after Consumer Sentiment Beats Expectations
Last Updated 10:10AM EST
Stock indices cut their losses after 40 minutes of trading. As of 10:10 a.m. EST, the Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 are relatively flat on the day.
On Friday, the University of Michigan released its preliminary results on consumer inflation expectations over the next five years. Consumers now expect inflation to be 3%. This number is lower than its June high of 3.3%. However, it hasn’t changed since last month’s report.
In addition, consumer sentiment and consumer expectations came in better than expected. Both measures increased compared to the previous report, with the former showing a print of 59.1 compared to a forecast of 56.9 and the latter coming in at 58.4 versus a forecast of 56.
Markets Open Lower after Hot Inflation Report
Last updated 9:41AM EST
Markets opened lower on Friday as wholesale inflation came in hotter than expected.
The Dow Jones Industrial Average (DJIA) slid 0.1%, while the S&P 500 (SPX) dropped 0.1%, as of 9:41 a.m. EST, Friday. Meanwhile, the Nasdaq 100 (NDX) declined 0.4%.
Last updated 8:46AM EST
Stock futures trended lower on Friday morning after PPI data indicated that wholesale inflation was higher than expected. The PPI for final demand grew by 0.3% in November, seasonally adjusted, similar to the trend seen in September and October. Consensus estimates had pegged PPI to go up by 0.2% in the month of November.
On an unadjusted basis, the PPI index increased by 7.4% for the 12 months ending in November, higher than expectations of 7.2%.
The PPI index excluding food, energy, and trade services grew by 0.3% in November versus 0.2% in October.
Futures on the Dow Jones Industrial Average (DJIA) slid 0.5%, while those on the S&P 500 (SPX) dropped 0.5%, as of 8:46 a.m. EST, Friday. Meanwhile, the Nasdaq 100 (NDX) futures declined 0.6%.
Last updated 5:26AM EST
Stock futures were slightly higher early Friday morning ahead of key inflation data.
Futures on the Dow Jones Industrial Average (DJIA) gained 0.11%, while those on the S&P 500 (SPX) climbed 0.23%, as of 5.13 a.m. EST, Friday. Meanwhile, the Nasdaq 100 (NDX) futures advanced 0.31%.
Lululemon (NASDAQ:LULU) dipped 7.5% despite an earnings and revenue beat after providing a weaker-than-expected fourth-quarter outlook in its Q3 print.
At the end of Thursday, the S&P 500 had gained 0.75%, breaking away from a five-day losing streak. The Dow and the Nasdaq 100 also clocked gains, each closing 0.55% and 1.22% higher.
Nonetheless, the worries of a recession, which were fueled by the comments of several CEOs of major companies, had kept the market sentiments down this week. Therefore, despite the gains on Thursday, all three indexes are on course to end the week lower than they began.
On Friday, data for the November Producer Price Index (PPI) is due to be released. The report will give investors a peek into how the wholesale market is performing as the Federal Reserve keeps raising the interest rates amid high inflation. The Consumer Price Index for November is due on December 13.
Ahead of the December FOMC meeting next week, investors are focused on every economic data that are coming in.
Although Fed Chair Jerome Powell has indicated a softer pace of interest rate hikes in the near future, the labor market and consumer spending trends still stand strong. This is a concern for investors that this might prompt the Fed to consider continuing aggressiveness with its policy.
A few months of consistent deflation is required to convince investors that the peak of inflation is behind us. Until then, markets are likely to remain volatile.
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