Last Updated 4:05PM EST
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Stock indices finished today’s trading session in the green. The Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 gained 0.1%, 0.93%, and 1.82%, respectively.
The healthcare sector was the session’s laggard, as it lost 1.25%. Conversely, the energy sector was the session’s leader, with a gain of 2.98%.
Furthermore, the U.S. 10-Year Treasury yield increased to 3.85%, an increase of more than three basis points. Similarly, the Two-Year Treasury yield also increased, as it hovers around 4.35%. This brings the spread between them to -50 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 80.6%, which is down from yesterday’s expectations of 85.4%.
In addition, the market is now also assigning a 19.4% probability to a range of 4.5% to 4.75%. For reference, investors had assigned a 14.6% chance yesterday.
Indices are Green Heading into the Close
Last Updated 3:00PM EST
Stocks are in the green heading into the final hour of today’s trading session. As of 3:00 p.m. EST, the Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 are up 0.1%, 0.9%, and 1.7%, respectively. In addition, WTI crude oil is also up today, as it hovers around the $89 per barrel range.
Nevertheless, gasoline prices have been trending lower. Indeed, the average price at the pump slightly decreased to $3.794 per gallon compared to yesterday’s price of $3.803 per gallon. This is significantly lower than the all-time high of $5.016 per gallon on June 14.
The highest prices can be found in California, where prices are substantially higher than the national average, at $5.458 per gallon. On the other hand, Texas is the state with the lowest gas prices, at $3.148 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 Remain Mixed; Consumer Sentiment Falls
Last Updated 12:15PM EST
Stock indices are mixed halfway into today’s trading session. As of 12:15 p.m. EST, the S&P 500 and the Nasdaq 100 were up 0.3% and 0.9%, respectively. Meanwhile, the Dow Jones Industrial Average fell 0.5%.
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’s slightly higher than the previous reading of 2.9%.
In addition, consumer sentiment and consumer expectations came in worse than expected. Both measures declined compared to the previous report, with the former showing a print of 54.7 compared to a forecast of 59.5 and the latter coming in at 52.7 versus a forecast of 56.
It’ll be interesting to see how these results will change going forward, given the softer-than-expected CPI report from earlier this week.
Indices are Mixed Following Yesterday’s Large Rally
Last Updated 10:00AM EST
Stock indices are mixed 30 minutes into today’s trading session. As of 10:00 a.m. EST, the S&P 500 and the Nasdaq 100 were both up 0.2%. Meanwhile, the Dow Jones Industrial Average fell 0.3%
The healthcare sector (XLV) is the laggard so far, as it is down 1.4%. Conversely, the energy sector (XLE) is the session’s leader with a gain of 2.8%.
WTI crude oil is higher today but remains below $90 per barrel as investors weigh the impact of easing COVID-19 restrictions in China along with a softening outlook that’s being caused by recession fears.
Meanwhile, bond yields are slightly higher to start the day, as the U.S. 10-Year Treasury yield is now hovering around 3.83%. This represents an increase of more than one basis point from the previous close.
Similar movements can be seen with the Three-Month yield, which is now at 4.2%. However, the spread between the 10-Year and Three-Month U.S. Treasury yields is still negative, as it currently sits at -37 basis points.
Futures Up as Inflation Cools and China Expected to Ease Restrictions
First Published 6:32AM EST
Stock futures rose early Friday morning after a remarkable day for the market indexes.
Futures on the Dow Jones Industrial Average (DJIA) gained 0.39%, while those on the S&P 500 (SPX) climbed 0.42%, as of 6.18 a.m. EST, Friday. Meanwhile, the Nasdaq 100 (NDX) futures advanced 0.63%.
Thursday’s Good News
On Thursday, China announced that it plans to take a step down in its Covid restrictions, buoying market sentiments. Many companies that depend on China for various aspects of business were concerned about how long they would have to continue being impacted by the restrictions.
Moreover, the remarkable reduction in October’s consumer price index (CPI) data gave investors another reason to rejoice. Headline inflation cooled to 7.7% year-over-year which was less than the Dow Jones estimate of 7.9%, providing a much-needed relief to investors. The CPI is a key piece of data tracked by the Federal Reserve to set the tone for its forthcoming policy path.
A relief rally in the equity market followed the updates, sending the U.S. Treasury yields southward. No wonder, tech stocks were the biggest gainers. The S&P 500, the Dow, and the Nasdaq 100 ended the day with gains of 5.54%, 3.7%, and 7.49%, respectively. The splendid gains set the indexes on the path to ending the week in the green.
Another encouraging update came from the National Association of Realtors, which revealed that U.S. home prices slowed sharply in the third quarter as a result of higher mortgage prices. The median price of a ready single-family home was up 8.6% year-over-year, down from the second quarter’s pace of 14.2%. This is a big decline, reflecting the effectiveness of the higher interest rates in controlling real estate prices.
Elections: Republicans on Track to Paint the House Red, Senate Still Uncertain
Meanwhile, on the election front, the Republicans are on the verge of winning over the House, although not by the “sweep” that they had expected. Seats at the Senate are still up in the air as Arizona and Nevada continue to count ballots and Georgia will head into a runoff on December 6.
In the meantime, President Biden is expected to attend the international climate talks in Egypt on Friday, which will focus on talks of geopolitical dynamics, among other things.
