Last Updated 4:05 PM EST
Stock indices finished today’s trading session mixed after a strong initial rally. The Dow Jones Industrial Average and the S&P 500 lost 0.34% and 0.08%, respectively. Meanwhile, the Nasdaq 100 gained 0.62%. The healthcare stocks were the session’s laggard, as the Health Care Select Sector SPDR Fund (XLV) lost 1.67%. Conversely, tech stocks were the session’s leader, as the Technology Select Sector SPDR Fund (XLK) gained 1.15%.
Furthermore, the U.S. 10-Year Treasury yield decreased to 3.53%. Similarly, the Two-Year Treasury yield also decreased, as it hovers around 4.20%. This brings the spread between them to -67 basis points.
Compared to Friday, the market is pricing in a higher chance of a lower Fed Funds rate for June 2023. In fact, the market’s expectations for a rate in the range of 5.25% to 5.5% decreased to 7.7% compared to Friday’s expectations of 9%.
In addition, the market is now also assigning a 47.1% probability to a range of 4.75% to 5%. For reference, investors had assigned a 44.9% chance Friday.
Last Updated 3:00PM EST
Stock indices are now mixed heading into the final hour of today’s trading session. As of 3:00PM EST, the Dow Jones Industrial Average is down 0.2% after being up nearly half a percent at one point. In addition, the S&P 500 and the Nasdaq 100 are still in the green at 0.2% and 1%, respectively. However, they are both well off their highs.
Tech Leads Rally; Housing Sentiment Improves
Last Updated 12:00PM EST
Equity markets are in the green halfway into the trading session. As of 12:00 p.m. EST, the Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 are up 0.8%, 1.4%, and 2.3%, respectively.
Earlier today, Fannie Mae released its monthly housing sentiment index, which demonstrated an improvement month-over-month. Indeed, the index increased by 3.7 points to 61.0. In December, 21% of respondents said now would be a good time to buy a house. For reference, the number was 16% in the previous month.
However, it’s worth noting that these numbers are still near record lows and still nothing to get excited about. In addition, the number of Sellers who think now is a good time to sell decreased from 54% to 51%.
It’ll be interesting to see if the uptrend will continue going forward as interest rates rise or if it will continue declining.
Last Updated 10:34AM EST
The Dow Jones Industrial Average rose 0.6% while the S&P 500 jumped 1.1% as of 10:34 a.m. EST, Monday. Meanwhile, the Nasdaq 100 popped by 1.9%.
Last Updated 9:30AM EST
Stocks climbed early Monday morning as an action-packed week of key economic data kicks off. Moreover, investors are also cheerful after data released on Friday indicated a slowing labor market.
The market experienced a remarkable rally on Friday, showing just how anxiously investors were waiting for any signs of the labor market calming down. The S&P 500, the Dow, and the Nasdaq 100 advanced 2.28%, 2.13%, and 2.79%, respectively.
Labor Market Might be Cooling
The non-farm payrolls report did come slightly ahead of expectations, at 223,000 as compared with the expected 200,000 job additions. Also, the unemployment rate reduced to 3.5% from 3.7% in December. These were concerning numbers, as investors and the Federal Reserve are looking for unemployment to rise and cripple the labor market as soon as possible to prevent any more aggressive interest rate hikes.
Nonetheless, wage growth in December was recorded at 4.6% year-over-year, which was below the 5% estimated by economists. This was a major reason for investors to rejoice, as wage inflation has persistently been a key catalyst fueling inflation. The slower pace of wage increase indicated that the Fed’s monetary policy could finally be achieving its goals.
The moderation is expected to continue, albeit at a slow pace. Demand for labor in the services sector is still high and is likely to remain so for some time.
Key Economic Updates to Look Out For
On Monday, consumer credit card data will be released, showing us how much consumers spent on credit in December. A speech from Atlanta Fed President Raphael Bostic will also be a key highlight of Monday for those who are closely watching for clues on economic progress.
All eyes will be on December’s Consumer Price Index due on Thursday, followed by the quarterly earnings releases of several big banks on Friday. Some of the banks lined up for Friday are Bank of America (NYSE:BAC), shadow bank BlackRock (NYSE:BLK), Citigroup (NYSE:C), and more.
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