Closing Stock Market Summary
The major indices settled today's session little changed from where they began today's session. That isn't a bad thing considering how far they have come since their late October lows. Little change is the equivalent of a victory for the bulls or, viewed in another light, a defeat for anyone hoping for a more meaningful pullback either because they are short the market or have an unmet desire to buy on weakness.
A staying factor today was provided by Fed Governor Waller (FOMC voter) who, according to CNBC, acknowledged that the policy rate could be lowered if inflation continues to fall for several more months. He went on to add that, if inflation continues to decline, there is no reason for rates to remain really high.
Those remarks were made around mid-morning and they sent the indices to their best levels of the day. That rush of buying interest eventually faded, though, reflecting some of the buyer exhaustion that has set in after the big run from the late October lows.
Fed Governor Bowman, also an FOMC voter, provided an offset of sorts to the rate-cut excitement when she noted in a speech today that she would support raising rates again if data show progress on inflation has stalled or is insufficient to bring inflation back down to 2 percent.
Her view notwithstanding, the fed funds futures market appeared to place more of a premium on Mr. Waller's remark than Ms. Bowman's comment. The probability of a 25 basis points rate cut at the May 2024 FOMC meeting increased to 64.3% from 52.9% yesterday.
The 2-yr note yield, which is more sensitive to changes in the fed funds rate, seemed to react in the same vein, all but ignoring a $39 billion 7-yr note auction that was met with weak demand. The 2-yr note yield declined 14 basis points to 4.73%. The 10-yr note yield fell five basis points to 4.34%.
The drop in rates was an otherwise supportive influence for stocks, which lacked concerted leadership. Advancers outpaced decliners by a small margin at the NYSE and the reverse held true at the Nasdaq.
The biggest gainers among the 11 S&P 500 sectors were the real estate sector (+0.5%) and the consumer discretionary sector (+0.5%). Conversely, the biggest loser was the health care sector (-0.5%).
The Vanguard Mega-Cap Growth ETF (MGK) was up 0.3% and the Invesco S&P 500 Equal-Weight ETF (RSP) was down 0.1%. The Russell 3000 Growth Index was up 0.2% and the Russell 3000 Value Index was down 0.1%.
Outsized moves today were reserved for individual issues like Pinduoduo (PDD 139.00, +21.28, +18.1%), which reported earnings, and Tesla (TSLA 246.72, +10.64, +4.5%), which cleared resistance at its 50-day moving average (236.43) ahead of its Cybertruck delivery event on Thursday.
- Nasdaq Composite: +36.5%
- S&P 500: +18.6%
- Dow Jones industrial Average: +6.8%
- S&P Midcap 400: +4.5%
- Russell 2000: +1.8%
Reviewing today's economic data:
- The Conference Board's Consumer Confidence Index checked in at 102.0 for November (Briefing.com consensus 100.0). That was up from a downwardly revised 99.1 (from 102.6) for October. Accordingly, it will be advertised as an uptick in confidence, but such an advertisement should carry the disclaimer that confidence increased in November from a downwardly revised number for the prior month.
- The key takeaway from the report is that confidence in future business conditions, job availability, and incomes for the next six months improved -- a helpful attitude that should support the market's prevailing soft landing outlook.
- The September FHFA Housing Price Index was up 0.6% month-over-month following an upwardly revised 0.7% increase (from 0.6%) in August.
- The September S&P Case-Shiller Home Price Index was up 3.9% month-over-month (Briefing.com consensus 4.1%) following a downwardly revised 2.1% increase (from 2.2%) in August.
Wednesday's economic calendar features:
- 07:00 ET: Weekly MBA Mortgage Index (prior 3.0%)
- 08:30 ET: Q3 GDP -- second estimate (consensus 4.9%; prior 4.9%), Q3 GDP Deflator -- second estimate (consensus 3.8%; prior 3.5%)
- 08:30 ET: October Adv. International Trade in Goods balance (prior -$85.8 bln), October Adv. Retail Inventories (prior 0.9%), and October Adv. Wholesale Inventories (prior 0.0%)
- 14:00 ET: November Fed Beige Book