Stocks Mixed as Earnings Pour in and Fed Decision Looms…..

U.S. stocks finished mixed with trade uncertainty festering ahead of this week’s key talks between the U.S. and China, while the markets likely treaded cautiously ahead of tomorrow’s monetary policy decision from the Fed. A flood of mixed earnings results were sifted through, with Dow member Verizon posting the first revenue miss in seven quarters, but fellow Dow components Pfizer and 3M rose after their reports. Treasury yields were lower and the U.S. dollar ticked higher, while the government shutdown seemed to pressure Consumer Confidence. Gold and crude oil prices moved to the upside.

The Dow Jones Industrial Average (DJIA) rose 52 points (0.2%) to 24,580, while the S&P 500 Index dipped 4 points (0.2%) to 2,640 and the NASDAQ Composite declined 57 points (0.8%) to 7,028. In moderate volume, 769 million shares were traded on the NYSE and 2.0 billion shares changed hands on the NASDAQ. WTI crude oil gained $1.32 to $53.31 per barrel and wholesale gasoline was up $0.02 at $1.37 per gallon. Elsewhere, the Bloomberg gold spot price gained $8.39 to $1,311.75 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was up 0.1% at 95.82.

The Consumer Confidence Index fell to 120.2 in January from December’s downwardly-revised 126.6 and below Bloomberg estimates of 124.0. This was the lowest level since July 2017 as the Present Situation Index remained solid, but the Expectations Index of business conditions for the next six months fell sharply month-over-month. On employment, the labor differential—consumers’ appraisal of jobs being “plentiful” minus being “hard to get”—ticked higher to 33.7 from the 33.3 level posted in December. Senior Director of Economic Indicators at the Conference Board Lynn Franco noted that shock events such as government shutdowns tend to have sharp, but temporary, impacts on consumer confidence, while adding that this month’s decline appears to be more the result of a temporary shock than a precursor to a significant slowdown in the coming months.

Treasuries finished higher, with the yield on the 2-year note decreasing 2 basis points (bps) to 2.57%, the yield on the 10-year note losing 4 bps to 2.71%, and the 30-year bond rate declining 3 bps to 3.04%. The Federal Open Market Committee (FOMC) began its two-day monetary policy meeting today and tomorrow the FOMC is not expected to announce another rate hike or deliver updated economic projections. However, the decision will be followed by a press conference by Fed Chairman Jerome Powell that will likely garner heavy scrutiny amid the backdrop of signs of a slowdown in the Fed’s balance sheet reduction measures and noticeable recent efforts to cool concerns that the FOMC was heading toward a policy mistake.

Ahead of the Fed’s decision and Friday’s key nonfarm payroll data, tomorrow’s economic calendar will bring the ADP employment change report, projected to show private sector payrolls rose by 181,000 in January, following December’s 271,000 jump. Mortgage applications and pending home sales will also be released.

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