Last Updated 4:05 PM EST
Stock indices finished today’s trading session in the green. The Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 gained 1.05%, 1.75%, and 2.54%, respectively.
The consumer staples sector was the session’s laggard, as it gained 0.44%. Conversely, the communications sector was the session’s leader, with a gain of 2.7%.
Furthermore, the U.S. 10-Year Treasury yield decreased to 3.83%. Similarly, the Three-Month Treasury yield also decreased, as it hovers around 4.42%. This brings the spread between them to -59 basis points.
Compared to yesterday, 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 8.8% compared to yesterday’s expectations of 9.5%.
In addition, the market is now also assigning a 44.5% probability to a range of 4.75% to 5%. For reference, investors had assigned a 43.1% chance yesterday.
Stock Rally Continues; Gasoline Prices Rise
Last Updated at 2:00PM EST
Stocks are in the green heading into the final two hours of today’s trading session. As of 2:00 p.m. EST, the Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 are up 1.2%, 1.9%, and 2.7%, respectively.
In addition, WTI crude oil is lower today, as it hovers around the mid-$77 per barrel range. Nevertheless, the commodity’s recent strength has caused prices at the pump to increase when compared to last week.
Indeed, the national average for regular gas was last $3.159 per gallon, up from last week’s reading of $3.101. However, this is still 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 $5.03 per gallon. On the other hand, Georgia is the state with the lowest gas prices, at $2.729 per gallon.
It’ll be interesting to see if this upward 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.
Positive Momentum Continues; Jobless Claims Rise
Last Updated 11:00AM EST
Stock Indices remain in the green as the positive momentum continues. As of 11:00 a.m. EST, the Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 are up 1%, 1.7%, and 2.5%, respectively.
On Thursday, the Department of Labor released its Initial Jobless Claims report, which came in line with expectations. In the past week, 225,000 people filed for unemployment insurance for the first time.
When using the four-week average, initial jobless claims were 221,000, down from last week’s reading of 221,250. It’s worth noting that this figure has been in an overall uptrend since the end of September.
In addition, Continuing Jobless Claims, which measures the number of unemployed people who qualify for unemployment insurance, came in at 1.710 million. This was above the forecast of 1.686 million and higher than last week’s print of 1.669 million.
Continuing Jobless Claims have been steadily increasing since the end of September as the layoffs from large companies continue to impact the workforce.
Optimism for Investors after Indices Open in Green
Last Updated 9:35AM EST
On Wednesday, it was revealed that U.S. pending home sales fell for a sixth consecutive month in November as current economic uncertainties and high mortgage rates kept potential buyers away from the market. Although the data did not come as a surprise, the major stock indexes ended the regular trading session in the red.
The S&P 500, the Dow, and the Nasdaq 100 ended the day lower by 1.2%, 1.1%, and 1.32%, respectively. The fear of a recession in 2023 also hung heavy on the market. The U.S. Treasury yield curve continues to remain inverted, which is a classic indication that a recession is looming ahead.
Moreover, the strong labor market trends also mean that the Federal Reserve is unlikely to pursue a reverse path soon, and interest rates are likely to remain elevated at least in 2023. The S&P 500 and Nasdaq Composite remain firmly in the bear market, down 20.6% and 34.7% year-to-date, respectively.
Elsewhere in the world, China’s economic reopening is failing to impress those who are seeing beyond the excitement. The supply chain issues across the world have not been resolved yet, inflation is still high, and most importantly, in this case, COVID-19 is still far from over. With the opening of China, an overload on the healthcare system is likely to disrupt their economy further, and that will have ripple effects across the supply chain.
Nonetheless, it should be kept in mind that a recession is an important market cycle and is always followed by a recovery. Thus, keeping a calm and longer-term view while investing is the key to being unaffected by a recession. Companies with solid leadership, strong brand name, and ample capitalization including a clean balance sheet should be in focus right now.
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