U.S. equities finished mixed and near the flat line amid a host of data and events for investors to digest. Congressional testimony came from two fronts, as U.S. Trade Representative Robert Lighthizer testified on U.S./China trade negotiations in front of the House Ways and Means Committee, while Fed Chairman Jerome Powell completed a second day of testimony on monetary policy. News on the economic front as mixed, as factory orders were below expectations, pending home sales were ahead of forecasts, and a final read on durable goods orders remained steady. In equity news, quarterly results from Best Buy and Lowe’s aided in gains for their respective stocks, but Weight Watchers suffered following earnings release. Treasury yields and the U.S. dollar were higher after both were lower yesterday, crude oil prices gained ground and gold was lower.
The Dow Jones Industrial Average (DJIA) declined 73 points (0.3%) to 25,985, the S&P 500 Index dipped 2 points (0.1%) to 2,793, while the NASDAQ Composite increased 5 points (0.1%) to 7,556. In moderate volume, 832 million shares were traded on the NYSE and 2.4 billion shares changed hands on the NASDAQ. WTI crude oil increased $1.44 to $56.94 per barrel and wholesale gasoline was up $0.04 to $1.76 per gallon. Elsewhere, the Bloomberg gold spot price traded $8.46 lower to $1,320.50 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—rose 0.2% at 96.17.
Factory orders grew 0.1% month-over-month (m/m) in December, versus expectations of a 0.6% rise, and compared to November’s upwardly-revised 0.5% decrease. Stripping out the volatile transportation component, orders moved 0.6% lower, above November’s unrevised loss. The final durable goods orders was unrevised at a 1.2% m/m increase for December, above November’s 0.9% rise. Ex-transportation, orders were up 0.1% m/m, compared to November’s 0.2% decline. Orders for non-defense capital goods excluding aircraft, considered a proxy for business spending, was revised lower to a 1.0% descent versus November’s 1.1% decline.
Pending home sales rose 4.6% month-over-month (m/m) in January, versus Bloomberg projections of a 1.0% increase, and following the downwardly-revised 2.3% drop registered in December. Sales were 3.2% lower y/y. Pending home sales reflect contract signings and are a gauge of the pipeline of existing home sales.
The trade balance showed that the deficit widened more than expected, coming in at $79.5 billion versus estimates of $73.6 billion. November’s deficit was unrevised at $70.5 billion.
Wholesale inventories were unrevised for December from the preliminary estimate of a 1.1% gain, and compared to expectations of 0.4% rise.
The MBA Mortgage Application Index rose 5.3% last week, following the prior week’s 3.6% gain. The increase came as a 4.6% rise in the Refinance Index added to a 6.1% gain for the Purchase Index. The average 30-year mortgage rate dipped 1 basis point to 4.65%.
Fed Chairman Jerome Powell concluded his testimony to Congress, today in front of the House Financial Services Committee, remaining within the scope of what he provided to the Senate Banking Committee yesterday. Powell said that the Fed is close to agreeing on a balance sheet plan and that an announcement will be coming “fairly soon.” He also continued to reiterate the Central Bank’s “patience” stance, while also saying that the Fed is not considering raising its inflation target.
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