Buzz on Business for Thursday, January 18^th, 2024

If last week’s economic reports, including a more robust than expected labor market and a higher than anticipated Consumer Price Index, poured cold water on the idea of a near-term cut in interest rates, yesterday’s economic numbers thoroughly stirred and mixed the ashes.

Stock Market Report

As we have said many times, stocks go up when they want to go up and go down when they want to go down. It falls to the likes of me, ex post facto, to find a rationale and write a headline.

Stocks were ready to go up back in October. Third-quarter earnings had been excellent; the economy seemed to be in good enough shape, and inflation, well, we’ll worry about inflation tomorrow. Nine weeks and fifteen percent later, tomorrow has arrived. It arrived yesterday, and apparently spent the night.

• The Dow Jones Industrial Average had been down over 230 points early in the day but rallied into the close. It finished at 37,267, off ninety-four points or one-quarter of one percent.
• The S&P 500  was off six-tenths and closed at 4,739, down twenty-seven points.
• The Nasdaq Composite was likewise down six-tenths of a percent. It closed at 14,856, off eighty-nine points.
• The RSP was down eight-tenths. The SOXL was off 2.60%

Bond Markets

Rates were up; bonds were down across the yield curve on Wednesday.

• The yield on the 2-year treasury was up thirteen ticks. It now stands at 4.361%
• The 20-year closed at 4.444%. That was up two basis points.

Oil and Gold

• Oil continues to mark time. It was up on Wednesday almost exactly what it was down on Tuesday. It closed at $72.67, up eighty-seven cents.
• Gold hates higher interest rates more than it loves inflation. It was down $23.70 and closed at $2,006.50

December Spending Shines as Inflation Fears Linger

It was a pretty good Christmas Season, which was reflected in the Consumer Spending numbers that were released before the opening bell yesterday.

Core Retail Sales grew by 0.4% in December versus expectations of 0.2%. Retail Sales for November were also released yesterday, and they likewise exceeded expectations, coming in at 0.6% versus expectations of a 0.4% increase.

The Atlanta Fed released its GDP Now figure, which estimated fourth-quarter economic growth at a 2.4% annual rate versus expectations of 2.2%. Hardly gangbusters but nowhere near “world ends” territory unless you’re a Wall Street trader who really needs rates to fall.

A bunch of Q4 earnings were released after the bell but mostly banks. A couple of red numbers, but the rest were good.

Today, we get Building Permits, Housing Starts, the Philly Fed Manufacturing Index, and Initial and Continuing Jobless Claims.

The markets seem edgy. These numbers could move them one way or the other. Everyone here at World Headquarters will be working overtime to figure out what it all means so we can report it tomorrow.

All you need to do is keep it right here!