Stocks Post Gains in Choppy Trading…..
U.S. equities finished higher in a roller coaster of a session, as the markets digested a number of key events. Fed Chairman Jerome Powell reiterated the hawkish tone set just a couple weeks ago in Jackson Hole, Wyoming, as the Central Bank remains determined to cool off inflation. As well, the European Central Bank (ECB) hiked its benchmark interest rates by 75 basis points, the largest increase in its history. Meanwhile, the trading day ended on a somber note after news of the death of Queen Elizabeth II. The equity front was relatively light, though McCormick & Company lowered its full-year guidance amid the inflationary environment, and American Eagle Outfitters missed estimates and paused its dividend. The economic calendar was also relatively quiet, but jobless claims unexpectedly moderated, and consumer credit expanded less than forecasts. Treasury yields were higher, and the U.S. dollar ticked lower after yesterday’s pullback from multi-decade highs. Crude oil prices gained ground, and gold traded to the downside. Markets in Asia and Europe finished mixed, as the global markets processed the commentary from the heads of the Fed and ECB.
The Dow Jones Industrial Average was up 193 points (0.6%) to 31,775, the S&P 500 Index increased 26 points (0.7%) to 4,006, and the Nasdaq Composite advanced 70 points (0.6%) to 11,862. In moderate volume, 3.9 billion shares of NYSE-listed stocks were traded, and 4.3 billion shares changed hands on the Nasdaq. WTI crude oil gained $1.60 to $83.54 per barrel. Elsewhere, the gold spot price decreased $9.30 to $1,718.50 per ounce, and the Dollar Index declined 0.2% to 109.66.
Jobless claims unexpectedly decelerates, Fed Chief maintains hawkish tone…..
Weekly initial jobless claims came in at a level of 222,000 for the week ended September 3, below the Bloomberg estimate of 235,000 and the prior week’s downwardly revised 228,000 level. The four-week moving average fell by 7,500 to 233,000, and continuing claims for the week ended August 27 rose by 36,000 to 1,473,000, above estimates of 1,438,000. The four-week moving average of continuing claims increased by 10,750 to 1,439,000.
Consumer credit, released in the final hour of trading, showed consumer borrowing was $23.8 billion during July, less than the $32.0 billion forecast of economists polled by Bloomberg, while June’s figure was adjusted downward to $39.1 billion from the originally reported $40.2 billion. Non-revolving debt, which includes student loans and loans for vehicles and mobile homes, expanded by $12.9 billion, a 4.4% increase y/y, while revolving debt, which includes credit cards, gained $10.9 billion, an 11.6% y/y rise.
Treasury yields were higher, with the yield on the 2-year note rising 5 basis points (bps) to 3.51%, and the yields on the 10-year note and the 30-year bond up 4 bps to 3.31% and 3.44%, respectively.
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