Last Updated: 4:00PM EST
Stock indices finished today’s trading session in the green, as the Nasdaq 100 (NDX), the S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) gained 1.47%, 0.88%, and 0.54%, respectively. These gains were driven primarily by Apple (AAPL)–which gained over 3% amid an analyst upgrade–and dovish fedspeak.
Earlier today, Atlanta Fed President Raphael Bostic revealed that he’s now anticipating interest rate cuts as early as the third quarter of 2024, a quarter sooner than previously projected. This change is attributed to the “unexpected progress” made in inflation and economic activity.
However, Bostic cautioned that initiating rate reductions before the July-September quarter might trigger a spike in demand, potentially reigniting inflationary pressures. He indicated a willingness to consider earlier rate cuts if future economic data solidly align with the Fed’s goal of price stability, although he stressed the need for convincing evidence before making such a decision.
In the mortgage sector, long-term rates have dipped to their lowest since May 2023, with the 30-year fixed-rate mortgages averaging 6.60% as of January 18, according to Freddie Mac. The 15-year fixed-rate mortgages also fell to an average of 5.76%.
Looking ahead, the Federal National Mortgage Association predicts that mortgage rates could fall below 6% by the end of 2024, leading to a gradual recovery in home sales and mortgage origination. This lower rate environment is also expected to boost refinance volumes, which are already showing signs of growth.
Last Updated: 11:00AM EST
Equity markets are mixed so far in today’s trading session. Earlier today, the Census Bureau released its U.S. Housing Starts report today, which measures the change in new residential buildings that began construction in the reported month on an annualized basis. In December, housing starts came in at 1.46 million versus expectations of 1.426 million. In addition, on a month-over-month basis, housing starts fell by 4.3%. This follows a 10.8% increase in last month’s report.
In addition, U.S. Building Permits beat expectations, with a print of 1.495 million compared to the forecast of 1.48 million. This was an increase from the prior month’s report, which came in at 1.467 million, equating to an increase of 1.9% month-over-month.
In other news, the Energy Information Administration (EIA) released its weekly Crude Oil (CM:CL) Inventories report, which measures the weekly change in the number of barrels of commercial crude oil held by U.S. firms.
Compared to last week, inventories decreased by -2.492 million barrels. For reference, economists were expecting a decrease of -0.313 million barrels week-over-week. This means that demand was stronger than anticipated.
First Published: 4:02AM EST
U.S. Futures were muted on Thursday as strong retail sales dimmed expectations for a March interest rate cut. Futures on the Nasdaq 100 (NDX) and S&P 500 (SPX) are up by 0.21% and 0.04%, respectively, at 3:32 a.m. EST, January 18, while the Dow Jones Industrial Average (DJIA) is down by 0.03%.
Moving to key earnings releases, Truist Financial (TFC) and Fastenal Company (FAST) will report their quarterly performance later today. In a prior update, chipmaker Taiwan Semiconductor (TSM) reported fourth-quarter results, with both earnings and revenues exceeding estimates.
In other corporate news, the stock of Tesla (TSLA) fell 1.2% yesterday after the EV giant lowered prices for its Model Y cars in Germany. Also, Apple (AAPL) dipped following a ban on selling its watches with blood oxygen sensors. Moreover, Discover Financial (DFS) shares fell 9% in the after-hours trading session. The credit card giant missed earnings expectations as it witnessed higher net charge-offs in the quarter.
Meanwhile, oil prices were trending higher at the time of writing due to rising tensions in the Middle East. The WTI crude oil futures were up, hovering near $73.26 per barrel as of the last check.
Elsewhere, European markets opened mixed as investors weighed comments from the 54th Annual Meeting of the World Economic Forum taking place in Davos, Switzerland.
Asia-Pacific Markets End Mixed on Thursday
Asia-Pacific indices ended today’s session on a mixed note as traders remained concerned over a sluggish economic recovery in China and the hawkish comments by the Federal Reserve’s officials.
Hong Kong’s Hang Seng index and China’s Shanghai Composite and Shenzhen Component indices finished higher by 0.75%, 0.43%, and 1%, respectively. On the contrary, Japan’s Nikkei and Topix indices ended down by 0.03% and 0.17%, respectively.
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