U.S. equities rose, recovering from a string of declines that came following yesterday’s rate hike from the Federal Reserve, as well as continued trade uncertainties and drama in Washington. Treasury yields were mixed and the U.S. dollar rose following a heavy economic calendar that offered a mixed durable goods orders report and an unrevised Q2 GDP figure. Crude oil prices were higher and gold lost ground.
The Dow Jones Industrial Average (DJIA) rose 55 points (0.2%) to 26,440, the S&P 500 Index was up 8 points (0.3%) to 2,914, and the Nasdaq Composite increased 52 points (0.7%) to 8,042. In moderate volume 751 million shares were traded on the NYSE and 2.0 billion shares changed hands on the Nasdaq. WTI crude oil gained $0.55 to $72.12 per barrel and wholesale gasoline was a $0.02 higher at $2.07 per gallon. Elsewhere, the Bloomberg gold spot price declined $9.71 to $1,184.73 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was 0.8% higher to 94.93.
August preliminary durable goods orders rose 4.5% month-over-month (m/m), compared to the Bloomberg estimate of a 2.0% rise, and July’s 1.7% decline was unrevised. Ex-transportation, orders were up 0.1% m/m, versus forecasts of a 0.4% rise and compared to July’s upwardly-revised 0.2% gain. Orders for non-defense capital goods excluding aircraft, considered a proxy for business spending, fell 0.5%, below projections of a 0.4% gain, and the prior month’s figure was revised slightly lower to a 1.5% increase from the initially reported 1.6% rise.
The final look (of three) at Q2 Gross Domestic Product, the broadest measure of economic output, showed a quarter-over-quarter (q/q) annualized rate of growth of 4.2%, unadjusted from the first revision to match expectations. Q1 GDP expanded by an unrevised 2.2% rate. Personal consumption was unrevised at a 3.8% gain, in line with estimates, and compared to the unrevised 0.5% increase posted in Q1.
On inflation, the GDP Price Index was unadjusted at a 3.0% rise, matching forecasts, while the core PCE Index, which excludes food and energy, was revised higher to a 2.1% gain, from the previous 2.0% increase, where it was expected to remain.
Weekly initial jobless claims increased by 12,000 to 214,000, versus estimates calling for a rise to 210,000, with the prior week’s figure being revised higher by 1,000 to 202,000. The four-week moving average ticked higher by 250 to 206,250, while continuing claims grew by 16,000 to 1,661,000, south of estimates of 1,678,000.
The advance goods trade balance unexpectedly widened to a deficit of $75.8 billion in August, from the downwardly-revised $72.0 billion in July, and versus expectations of a $70.6 billion shortfall.
Preliminary wholesale inventories were up 0.8% m/m in August, versus forecasts of a 0.3% gain, and following July’s unrevised 0.6% increase.
Pending home sales fell 1.8% m/m in August, versus projections of a 0.5% decrease, and following the downwardly-revised 0.8% decline registered in July. Sales were 2.5% lower y/y, compared to the expected 1.0% drop. Pending home sales reflect contract signings and are a gauge of the pipeline of existing home sales, which were flat in August, snapping a string of monthly declines.
The September Kansas City Fed Manufacturing Activity Index surprisingly declined to 13, from August’s 14 level, versus forecasts of 17, but a reading above zero denotes expansion.
Treasuries were little changed, as the yield on the 2-year note was 1 basis point higher at 2.83%, while the yields on the 10-year note and 30-year bond were flat at 3.05% and 3.18%, respectively.
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