Dow and S&P 500 Post a Sixth Day of Losses…..

U.S. equities finished mixed in a choppy trading session, with the Dow and S&P 500 both notching a sixth-straight day of losses. The moves came as investors remain focused on recent monetary policy decisions around the world, which have elevated recession concerns. In economic news, durable goods orders declined less than expected, but a read on capital spending rose noticeably above forecasts, while home prices unexpectedly fell from last month. Additionally, Consumer Confidence rose more than projected, new home sales unexpectedly increased, and manufacturing activity in the Richmond region was little changed. In light equity news, Cracker Barrel beat earnings estimates and raised its full-year guidance. Treasury yields were mixed, and the U.S. dollar was slightly higher, adding to a string of fresh 20-year highs recently. Crude oil and gold prices gained ground. European markets turned to the downside late in the day to finish mostly lower amid heightened energy and monetary policy concerns. Stocks in Asia ended mixed, although Chinese issues rose noticeably after signs of easing COVID restrictions.

The Dow Jones Industrial Average decreased 126 points (0.4%) to 29,135, the S&P 500 Index was down 8 points (0.2%) to 3,647, while the Nasdaq Composite finished 27 points (0.3%) higher at 10,830. In moderate volume, 4.5 billion shares of NYSE-listed stocks were traded, and 4.4 billion shares changed hands on the Nasdaq. WTI crude oil gained $1.79 to $78.50 per barrel. Elsewhere, the gold spot price nudged $1.50 higher to $1,634.90 per ounce, and the Dollar Index inched 0.1% to the upside to 114.21.

Durable goods orders beat forecasts, consumer confidence rose, new home sales soared…..

August’s preliminary durable goods orders went down 0.2% month-over-month (m/m), north the expected 0.3% decrease, and versus the prior month’s unrevised 0.1% decline. Excluding transportation, orders remained at last month’s 0.2% rise as expected. Finally, nondefense capital goods orders excluding aircraft—considered a proxy for capital spending—went up 1.3% m/m, well north of expectations of a 0.3% growth rate, and versus the prior month’s upwardly revised 0.7% rise.

The 20-city composite S&P CoreLogic Case-Shiller Home Price Index for July showed a 16.06% y/y gain in home prices, below the Bloomberg consensus estimate of a 17.05% rise, and versus the prior month’s upwardly revised 18.66% increase. Home prices were down 0.44% m/m on a seasonally adjusted basis, compared to forecasts of a 0.20% gain, and versus the prior month’s downwardly revised 0.19% rise.

The Conference Board’s Consumer Confidence Survey increased to 108.0 in September from August’s upwardly revised 103.6 level, and versus the Bloomberg estimate calling for a reading of 104.6. The index movement was elevated by the Expectations Index of business conditions for the next six months portion of the index, which increased to 80.3 from August’s upwardly revised 75.8 level. The Present Situation Index portion of the survey also moved upwards to 149.6 from the previous month’s downwardly revised 145.3 level. Lynn Franco, Senior Director of Economic Indicators at The Conference Board, stated, “Consumer confidence improved in September for the second consecutive month supported in particular by jobs, wages, and declining gas prices.” She went on to say that while recession risks persisted, “Concerns about inflation dissipated further in September—prompted largely by declining prices at the gas pump—and are now at their lowest level since the start of the year.” On employment, the labor differential—consumers’ appraisal of jobs being “plentiful” minus being “hard to get”—increased to 38.0 from the 36.0 level posted in August.

The Richmond Fed Manufacturing Activity Index reported little change in activity for September, as shown by the 0 level that was reported; A reading of 0 is the demarcation point between expansion and contraction. The index rose from August’s -8 level, and was well above forecasts calling for a reading of -10. New order volumes, capacity utilization, vendor lead time, and local business conditions all improved but remained in contraction territory. Shipments soared into expansion territory, and capital expenditures moved higher into expansion territory. Services expenditures, on the other hand, remained expansionary, but did decrease.

In housing news, new home sales unexpectedly soared 28.8% m/m in August to an annual rate of 685,000 units, versus forecasts calling for a rate of 500,000 units, and versus July’s upwardly revised 532,000-unit level. The median home price declined 6.3% y/y to $436,800. New home inventory decreased to 8.1 months from July’s level of 10.4 months of supply at the current sales pace. Sales increased m/m in all regions, and were up y/y in the South and Mid-west. The North-east and West, however, were still down y/y. 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.

Treasury yields were mixed, with the yield on the 2-year note declining 1 basis point (bp) to 4.30%, the yield on the 10-year note rising 11 bps to 3.97%, and the 30-year bond rate climbing 17 bps to 3.86%.

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