Stocks Finish Higher in Choppy Action…..

U.S. equities finished in the green despite some choppy trading in the session, as both the S&P 500 and Dow closed at fresh records again today. Investors sifted through a heavy earnings slate today that saw Facebook become the first tech heavyweight to post quarterly results, beating on the bottom line, but falling short on revenues. Meanwhile General Electric and Dow member 3M Company both topped the Street’s forecasts. Supply-chain challenges and persistent inflation continued to be a theme among commentary from companies reporting. The economic calendar was also heavy today as consumer confidence surprised to the upside, new home sales jumped, a read on regional manufacturing moved back into expansionary territory, but housing prices fell short of estimates. Treasuries were mixed with the curve flattening slightly, and the U.S. dollar ticked higher. Gold lost ground, and crude oil continued its trek higher. Europe finished broadly higher amid earnings from both sides of the pond, and Asia finished mixed following new property debt concerns out of the region.

The Dow Jones Industrial Average gained 16 points to 35,757, while the S&P 500 Index increased 8 points (0.2%) to 4,575, and the Nasdaq Composite rose 9 points (0.1%) to 15,236. In moderate volume, 801 million shares were traded on the NYSE and 6.9 billion shares changed hands on the Nasdaq. WTI crude oil was up $0.89 at $84.65 per barrel. Elsewhere, the gold spot price fell $11.80 to $1,795.00 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—rose 0.1% to 93.93.

The Conference Board’s Consumer Confidence Index increased to 113.8 in October from September’s upwardly-revised 109.8 level, and versus the Bloomberg estimate calling for a decline to 108.3. The index rebounded after posting losses in the prior three months, as both the Present Situation Index portion of the survey and the Expectations Index of business conditions for the next six months rose. On employment, the labor differential—consumers’ appraisal of jobs being “plentiful” minus being “hard to get”—rose to 45.0 from the 42.5 level posted in September.

The Conference Board noted that, “Consumer confidence improved in October, reversing a three-month downward trend as concerns about the spread of the Delta variant eased. While short-term inflation concerns rose to a 13-year high, the impact on confidence was muted. The proportion of consumers planning to purchase homes, automobiles, and major appliances all increased in October—a sign that consumer spending will continue to support economic growth through the final months of 2021.”

New home sales rose 14.0% month-over-month (m/m) in September to an annual rate of 800,000 units, above the Bloomberg forecast calling for a rate of 756,000 units, and compared to August’s negatively-revised 702,000-unit level. The median home price jumped 18.7% y/y to a record $408,800. New home inventory remained unchanged at August’s level of a 5.7-months supply at the current sales pace. Sales rose in all regions m/m, except in the Midwest, with a sharp gain seen in the Southern region. Sales in all the major regions were solidly lower compared to the same period a year ago, save the Northeast which was able to post a gain. New home sales are based on contract signings, offering a timelier read on housing activity compared to the larger contributor of existing home sales, which are based on closings.

The Richmond Fed Manufacturing Activity Index moved back to a level depicting expansion (a reading above zero) for this month. The index rose to 12 from September’s -3 reading, and versus forecasts calling for an increase to 5. The index rebounded from its first negative reading since May 2020, as new order volume rose back to positive territory, as did capacity utilization and shipments, while order backlogs also increased from the previous month.

The 20-city composite S&P CoreLogic Case-Shiller Home Price Index showed a 19.67% year-over-year (y/y) gain in home prices in August, slightly below estimates. Compared to the prior month, home prices were up 1.2% on a seasonally adjusted basis, compared to forecasts of a 1.5% gain.

Treasuries were mixed, with the yield on the 2-year note up 1 basis point (bp) at 0.44%, the yield on the 10-year note ticked 2 bps lower to 1.62%, while the 30-year bond rate was down 4 bps at 2.04%.

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