Last Updated 4:03 pm EST
Stock indices ended today’s trading session in the green after powell speech. The Dow Jones Industrial Average (DJIA), the S&P 500 (SPX), and the Nasdaq 100 (NDX) gained 0.02%, 1.05% and 2.16%, respectively.
The energy sector (XLE) was the laggard of the session, as it lost 1.93%. In contrast, the technology sector (XLK) was the session leader, with a gain of 2.34%. Additionally, WTI Crude Oil fell while hovering around the mid-range of $76 per barrel.
In addition, the 10-year US Treasury yield fell to 3.4%, a decline of more than 11 basis points. Similarly, the two-year Treasury yield also declined as it hovers around 4.1%.
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, he estimates that the economy will expand by around 0.7% in the first quarter.
This is unchanged from their previous estimate of 0.7%, which can be attributed to recent releases from the US Census Bureau and the Institute for Supply Management’s Manufacturing ISM Report.
However, inflation is still a problem around the world. So it will be interesting to see what actual GDP growth will be and how it will change going forward as higher rates start to hit the economy.
Last update 3:10 pm EST
Stocks rose after the Federal Reserve raised its benchmark interest rate to 4.75%. This move was widely expected as the central bank had previously hinted that it would slow its rate hikes.
However, while some investors may see this as a bullish sign after getting used to higher rate hikes, it is important to remember that the Federal Reserve is still continuing to tighten financial conditions. This means that the economy will slow down.
In fact, it is widely believed that monetary policy has a lag of six to 12 months before impacting the broader economy. That means the rising number of layoffs is a result of where interest rates were in mid-2022. Also, it’s worth noting that the Federal Reserve plans to keep rates higher for a while once they peak.
Last Update: 12:00 pm EST
Stocks are in the red midway through today’s trading session as investors awaited the big decision from the Fed regarding an interest rate hike. As of 12:00 pm EST, the Dow Jones Industrial Average, S&P 500, and Nasdaq 100 were down 0.9%, 0.5%, and 0.3%, respectively.
Earlier today, the Institute for Supply and Management released its monthly report for the ISM Manufacturing Purchasing Managers’ Index, which measures the month-over-month change in production levels. A number above 50 represents expansion, while any number below 50 means contraction. The report came in at 47.4, which was lower than the 48 expected.
It’s worth noting that this indicator is lower than last month’s reading of 48.4 and has been trending down slowly since its peak in April 2021, when it peaked at 64.7.
Additionally, the Bureau of Labor Statistics released its JOLTS vacancy report, which helps measure job openings in the US. The number came in at 11.012 million openings for December, up from the 10.25 million expected.
Although below the peak of 11.855 million, job offers are still near their highs. Nonetheless, job openings are in general decline, and it will be interesting to see if this trend continues as rates continue to rise while growth slows.
Also, it is important to remember that this data is from December, so it is a lagging indicator. Since then, many companies have announced that they will reduce their staff to reduce costs.
Last Update: 9:48am EST
Stocks opened in the red on Wednesday as investors awaited the Fed’s big decision on an interest rate hike.
The Dow Jones Industrial Average (DJIA) and the S&P 500 (SPX) fell 0.6% and 0.33%, respectively, while the Nasdaq 100 (NDX) was down 0.28% at 9:48 am EST on Wednesday.
In other news, ADP non-farm payrolls data came in on Wednesday and indicated that job growth continued to moderate in January. The data indicated that 106,000 jobs were added in January versus a consensus of 158,000 and less than the 235,000 job addition in December.
Earnings season continued with another round of earnings announced before the markets opened. While tobacco giant Altria (New York Stock Exchange: MO) delivered mixed fourth quarter resultstelecommunications giant T-Mobile (NASDAQ:TMUS) reported Fourth quarter revenue below estimates.
Meanwhile, the fitness platform Peloton Interactive (NASDAQ:PTON) delivered better results than expected as its losses narrowed in the quarter.
First Post: 5:50am EST
Dow Jones Industrial Average Futures (DJIA) and the S&P 500 (SPX) fell 0.45%, while those of the Nasdaq 100 (NDX) were down 0.39% at 5:50 AM. m. EST on Wednesday.
After closing January on a solid footing, stock futures fell lower on February 1 as investors await the Federal Reserve’s interest rate hike decision expected later today. In January alone, the SPX gained 6.60%, the DJIA 2.87% and the NDX 11.53%.
Traders will also be keeping an eye on earnings from major US tech companies. metaplatforms (NASDAQ: GOAL) reports today after the market closes. Also, Amazon (NASDAQ:AMZN), Alphabet (NASDAQ:GOOGL), and Apple (NASDAQ:AAPL) report tomorrow. Investors will be watching the comments from the management of these companies to gauge what the future holds for the stock market.
At the time of writing, European markets were trading slightly higher on the positive news from the European inflation reading. In particular, the eurozone headline inflation figure for January was 8.5%, marking the third consecutive month of decline supported by a drop in energy prices.
Markets eagerly await Powell’s speech
The main focus for today would be the FOMC interest rate announcement and Fed Chairman Powell’s subsequent speech for any indication of future interest rate moves. Markets may have factored in a 25 basis point rate hike, but will be watching for any aggressive comments from Powell later. His speech is likely to drive sentiment and market direction for a couple of days.
Asia-Pacific markets witness a mixed day
Most of the Asia-Pacific markets ended the day in the green along with their US counterparts. Hong Kong’s Hang Seng Index gained 1.05%, while the Shanghai Composite and mainland China’s Shenzhen Component rose 0.90% and 1.38% respectively.
Japan’s Nikkei 225 gained 0.07%, while the Topix ended the day down 0.15%.
India’s Nifty 50 Index ended the day down 0.26% after witnessing a volatile trading day. On the one hand, investors applauded the new budget, on the other, traders were concerned by the news that Credit Suisse (New York Stock Exchange: CS) stopped accepting Adani Group bonds as collateral due to Hindenburg’s short selling report.
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