Last Updated 4:05 PM EST
Stock indices finished mixed in today’s trading session. The Dow Jones Industrial Average gained 0.11%. Meanwhile, the S&P 500 and the Nasdaq 100 fell 0.4% and 1.48%, respectively.
The consumer discretionary sector was the session’s laggard, as it lost 1.63%. Conversely, the energy sector was the session’s leader, with a gain of 1.07%.
Furthermore, the U.S. 10-Year Treasury yield increased to 3.85%. Similarly, the Two-Year Treasury yield also increased, as it hovers around 4.39%. This brings the spread between them to -54 basis points.
Compared to Friday, the market is pricing in a higher chance of a higher Fed Funds rate for June 2023. In fact, the market’s expectations for a rate in the range of 5% to 5.25% increased to 39.9% compared to Friday’s expectations of 46.5%.
In addition, the market is now also assigning a 7.7% probability to a range of 4.5% to 4.75%. For reference, investors had assigned a 15.6% chance Friday.
Last Updated at 3:08 PM EST
Stock indices remain mixed heading into the final hours of today’s trading session. As of 3:08 p.m. EST, the Dow Jones Industrial Average is up 0.2%. Meanwhile, the S&P 500 and the Nasdaq 100 are down 0.3% and 1.3%, respectively.
In addition, WTI crude oil is higher today, as it hovers around the mid-$79 per barrel range. Nevertheless, 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 $3.104 per gallon, down from last week’s reading of $3.123. 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 $5.04 per gallon. On the other hand, Texas is the state with the lowest gas prices, at $2.664 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.
Last Updated 11:26AM EST
Stock indices are mixed as they struggle to find a direction in today’s trading session. As of 11:26 a.m. EST, the Dow Jones Industrial Average is up 0.3%. Meanwhile, the S&P 500 and the Nasdaq 100 are down 0.2% and 0.9%, respectively.
On Tuesday, Standard & Poor’s released its United States S&P/Case-Shiller House Price Index Composite – 20 n.s.a. This report measures the change in house prices in 20 metropolitan areas.
On a year-over-year basis, home prices increased 8.6% in October, higher than the expected 8.2%. This is lower than last month’s reading of 10.4%. However, prices decreased by -0.8% on a month-over-month basis. This is on top of the previous month’s report of a -1.5% drop and represents the fourth straight month of declines.
However, it’s important for investors to remember that this report is for October, meaning that there is quite a substantial lag in the data. It is possible that the current picture is actually worse, as the cost of financing a home remains high while purchasing power falls.
Last Updated 9:58AM EST
After the earlier spate of optimism, indices are red with a weak undertone at the start of trade today.
The markets were closed Monday for Christmas. During Friday’s regular trading session, the Dow Jones Industrial Average closed 0.53% higher, the S&P 500 grew 0.59%, and the Nasdaq 100 advanced 0.27%.
Typically, a rally, also known as the Santa Claus rally, is seen in the last five trading days every year and the first two trading days of the next. This year, Friday marked the beginning of the period. However, due to low trading volumes, the final week is likely to remain quiet and uneventful. Also, even if a rally stretches into a proper Santa Claus rally, it most likely will not be enough to lift the weight of recession fears off the market. Stocks are on track to close the year in the red, clocking the worst annual performance since 2008.
On the economic front, November’s wholesale inventories data is expected to be out on Tuesday, along with October’s S&P/Case-Shiller home prices.
Macroeconomic Backdrop Largely Unchanged
On the books, we saw two consecutive months of cooling inflation. Nonetheless, inflation is still out of control in various parts of the economy. For instance, the price of eggs, margarine, and flour surged more than overall costs this year, making it difficult for the baking industry to run.
Moreover, price inflation in the food industry infamously ballooned this year, hitting the highest level since 1979 in August, according to data released by the Labor Department.
Apart from that, the labor market still stands strong, indicating that the Federal Reserve’s interest rate increases have not yet succeeded in restraining the economy. This also means that more interest rate hikes await us next year, and those can possibly tip the economy into a phase of contraction.
Nonetheless, this will be an anticipated recession, so it should not deter investors from investing in the long-term.
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