Stocks Mostly Higher After Fed’s Beige Book…..

U.S. equities closed mostly higher in a somewhat cautious session as the S&P 500 and Dow continued to flirt with all-time highs. Much of the cautious tone early was attributed to the afternoon reveal of the Fed’s Beige Book report. The report noted modest to moderate growth across the majority of districts, but also saw prices characterized as “significantly elevated” in most districts. Concerns about supply-chain and labor challenges featured predominantly in the report as well and have fostered expectations from the markets that the Fed and other global central banks may soon begin to tighten monetary policies. Q3 earnings results remained in focus, as Netflix posted better-than-expected bottom-line figures and bested the Street’s forecasts on subscriber growth, while United Airlines reported a smaller loss than what analysts were expecting, but revenues and passenger capacity remained below pre-pandemic levels. Meanwhile, M&A grabbed late headlines after reports that PayPal is weighing a possible deal for Pinterest. Treasuries were mixed after the yield curve has steepened somewhat lately, and the U.S. dollar ticked lower, while gold gained ground, and crude oil prices added to a recent run. In economic news, mortgage applications dropped last week amid an increase in interest rates. Asia finished mixed, with weakness in Chinese markets coming up against a rally in Hong Kong stocks, while Europe closed higher in a relatively lackluster trading session.

The Dow Jones Industrial Average was up 152 points (0.4%) to 35,609, the S&P 500 Index increased 17 points (0.4%) to 4,536, and the Nasdaq Composite lost 7 points (0.1%) to 15,122. In moderate volume, 738 million shares were traded on the NYSE and 4.0 billion shares changed hands on the Nasdaq. WTI crude oil increased $0.98 to $83.42 per barrel. Elsewhere, the gold spot price increased $14.40 to $1,784.90 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—declined 0.1% to 93.61.

Mortgage applications tumble, Fed Beige book sees modest to moderate growth…..

In afternoon action, the Federal Reserve released its Beige Book, an anecdotal read on the nation’s business activity used as a policy tool to prep for the Fed’s next two-day monetary policy meeting set to conclude on November 3. The report noted that economic growth continued at a moderate to modest pace; however, several Districts noted a slowed pace of growth for the period. The majority of Districts indicated positive growth in consumer spending, yet auto sales declined. Employment continued to increase at a similarly modest to moderate pace, as demand for workers persisted, but was tempered by a low supply of workers. Regarding inflation, most Districts reported significantly elevated prices, with supply-chain issues contributing to rising input costs across industry sectors, and increased transportation, labor constraints and commodity shortages also adding to pricing pressures.

The MBA Mortgage Application Index dropped 6.3% last week, following the prior week’s 0.2% increase. The decline came as a 7.1% fall in the Refinance Index was met with a 4.9% decrease for the Purchase Index. The average 30-year mortgage rate rose 5 basis points (bps) to 3.23%.

Treasuries were mixed, as the yield on the 2-year note declined 2 bps to 0.38%, while the yield on the 10-year note was 1 bp higher at 1.64%, and the 30-year bond rate ticked 4 bps higher to 2.12%.

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