Closing Stock Market Summary
The major indices all started the session with somewhat mixed action, oscillating around yesterday's closing levels. Buying activity picked up in the afternoon trade, though, which helped some mega caps to recover from early losses or extend early gains. The afternoon move higher left the major indices near their highs of the day with somewhat modest gains. The S&P 500 for its part was approaching 4,200 today.
Apple (AAPL 170.77, +0.48, +0.3%), which reports quarterly results after Thursday's close, was down as much as 1.4%, but closed with a gain. Microsoft (MSFT 338.11, +0.80, +0.2%) also recovered from a loss, having been down as much as 0.8%.
The Vanguard Mega Cap Growth ETF (MGK) rose 0.5% and the market-cap weighted S&P 500 closed with a 0.7% gain. All 11 S&P 500 sectors closed with a gain led by real estate (+2.0%) and financials (+1.1%). The communication services sector (+0.2%) saw the slimmest gain.
A big batch of earnings news since yesterday's close was met with mixed reactions. Dow components Caterpillar (CAT 226.05, -16.11, -6.7%) and Amgen (AMGN 255.70, -7.49, -2.9%) were losing standouts following their earnings reports while Pinterest (PINS 29.88, +4.78, +19.0%) and Arista Networks (ANET 200.37, +24.65, +14.0%) registered outsized gains after their quarterly results.
Market participants were also looking ahead to the remainder of this week's market-moving events. Those events include the FOMC decision tomorrow, followed by Apple's earnings reports and the Bank of England's policy decision on Thursday.
In other central bank news, the Bank of Japan announced that the upper bound of 1.0% for 10-yr JGB yields will be viewed now as a "reference point" rather than a strict cap, which has been viewed as less hawkish-than-feared. That announcement helped temper concerns about a more aggressive unwinding of carry trades, which have been supportive for some time for the Treasury market and the stock market.
The 2-yr note yield settled three basis points higher at 5.08% and the 10-yr note yield was unchanged from yesterday at 4.88%. The USD/JPY was at 151.62, up 1.7%, in response to the BOJ decision.
- Nasdaq Composite: +22.8% YTD
- S&P 500: +9.2% YTD
- Dow Jones Industrial Average: -0.3% YTD
- S&P Midcap 400: -2.6% YTD
- Russell 2000: -5.6% YTD
Reviewing today's economic data:
- October Chicago PMI 44.0 ( consensus 45.0); Prior 44.1
- Q3 Employment Cost Index 1.1% ( consensus 1.0%); Prior 1.0%
- The key takeaway from the report is that compensation costs decelerated to 4.3% for the 12-month period ending in September versus 5.0% in September 2022. Still, that's not enough of a change to convince the Fed that it can think about cutting rates anytime soon.
- August FHFA Housing Price Index 0.6%; Prior 0.8%
- August S&P Case-Shiller Home Price Index 2.2% ( consensus 0.3%); Prior was revised to 0.2% from 0.1%
- October Consumer Confidence 102.6 (Briefing.com consensus 100.0); Prior was revised to 104.3 from 103.0
The key takeaway from the report is that rising prices and higher interest rates are pressuring consumer confidence, particularly among householders aged 35 and up irrespective of income group.
- October Consumer Confidence 102.6 (Briefing.com consensus 100.0); Prior was revised to 104.3 from 103.0
Wednesday's economic calendar features:
- 7:00 ET: Weekly MBA Mortgage Index (prior -1.0%)
- 8:15 ET: October ADP Employment Change consensus 100K; prior 89K)
- 9:45 ET: Final October S&P Global US Manufacturing PMI (prior 49.8)
- 10:00 ET: September Construction Spending ( consensus 0.4%; prior 0.5%), October ISM Manufacturing Index ( consensus 49.0; prior 49.0), and September job openings (prior 9.610 mln)
- 10:30 ET: Weekly crude oil inventories (prior +1.37 mln)
- 14:00 ET: November FOMC Rate Decision (consensus 5.25-5.50%; prior 5.25-5.50%)