Last Updated 4:05 PM EST
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Stock indices finished today’s trading session in the red. The Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 fell 1.03%, 1.44%, and 2.01%, respectively.
The communications sector was the session’s laggard, as it fell 2.86%. Conversely, the utilities sector was the session’s leader, with a gain of 0.64%. In addition, WTI crude oil fell as it hovers around the mid-$74 range.
Furthermore, the U.S. 10-Year Treasury yield decreased to 3.52%, a decrease of more than five basis points. Similarly, the Two-Year Treasury yield also decreased, as it hovers around 4.36%.
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 3.4% in the fourth quarter.
This is higher than its previous estimate of 2.8%, which can be attributed to recent data released from the U.S. Census Bureau, the U.S. Bureau of Labor Statistics, and the Institute for Supply Management.
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 Continue Falling Heading into the Close
Last Updated at 3:00PM EST
Stocks are in the red 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 down 1.4%, 1.8%, and 2.3%, respectively.
In addition, WTI crude oil is lower today, as it hovers around the mid-$74 per barrel range. 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 $3.38 per gallon, down from last week’s reading of $3.521. 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 $5.181 per gallon. On the other hand, Texas is the state with the lowest gas prices, at $2.78 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 See Losses Deepen Halfway into Trading Session
Last Updated 12:00AM EST
Stock indices are in the red 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 down 0.8%, 1.1%, and 1.5%, respectively.
The communications sector (XLC) is the laggard so far, as it is down 2.6%. Conversely, the utilities sector (XLU) is the session’s leader, with a gain of 0.01%.
WTI crude oil remains below $80 per barrel as investors weigh the impact of a possible recession and lower demand from China, which is the world’s largest importer of crude oil.
Meanwhile, bond yields are lower as the U.S. 10-Year Treasury yield is now hovering around 3.56%. This represents a decrease of more than one basis point from the previous close.
Similar movements can be seen with the Two-Year yield, which is now at 4.39%. As a result, the spread between the 10-Year and Two-Year U.S. Treasury yields is still negative, as it currently sits at -84 basis points.
Markets Open Lower as Monday Blues Persist
Last updated 9:40AM EST
U.S. stock markets continued to edge lower on Tuesday as U.S. Treasury yields continued to remain under pressure.
The Dow Jones Industrial Average (DJIA) ticked lower by 0.2%, while the S&P 500 (SPX) was down by 0.3% as of 9:40 a.m. EST, Tuesday. Meanwhile, futures on the tech-heavy Nasdaq 100 (NDX) were down by 0.7%.
Last updated 8:35AM EST
U.S. stock futures were mixed on Tuesday after all three major indices fell on the first trading of the week over concerns about future rate hikes by the Federal Reserve.
Futures tied to the Dow Jones Industrial Average (DJIA) ticked lower by 0.03% while the S&P 500 (SPX) was up 0.1%, as of 8.35 a.m. EST, Tuesday. Meanwhile, futures on the tech-heavy Nasdaq 100 (NDX) were up 0.2%.
After two straight weeks of gains, the major averages ended in the red on Monday. The Dow Jones Industrial Average, the S&P 500 Index, and the Nasdaq 100 declined 1.4%, 1.79%, and 1.73%, respectively, yesterday.
The stronger-than-anticipated readings from the Institute for Supply Management on the non-manufacturing sector and the Census Bureau’s October Factory Orders data drove fears about a higher interest rate hike. The Federal Reserve’s monetary tightening is taking time to achieve the desired effect, so higher hikes could be in our future. That contrasts with last week’s sentiment when Fed Chair Jerome Powell signaled that December’s rate hike would be smaller following four consecutive hikes of 75 basis points.
Investors are worried that continued rate hikes by the Fed might push the economy into a recession. Several U.S. companies have been reducing their headcounts or freezing hiring amid stubbornly high inflation and macro challenges. For example, consumer staples behemoth PepsiCo (PEP) is reportedly considering laying off hundreds of employees in its North American snacks and beverage businesses.
Meanwhile, oil prices edged higher early Tuesday after declining 3.8% in the previous session over concerns about continued rate hikes by the Fed. The sanctions on Russian seaborne oil and further easing of China’s COVID restrictions are fueling the rise in Tuesday’s crude prices. Particularly, the prospects of higher demand in China following the easing of restrictions could be a major catalyst in the days ahead. China is the world’s largest oil importer.
Coming to economic releases, the U.S. Bureau of Economic Analysis is expected to announce October’s trade deficit numbers today. Experts estimate the October trade deficit to come in at $80 billion. Last month’s report revealed a sharp widening in the September trade deficit to $73.3 billion from $65.7 billion in August, reflecting the impact of a strong U.S. dollar and softening global demand for exports.
