S&P 500 and Nasdaq rise after weekly jobless claims hit 52-year low, PCE inflation jumps – News Couple

S&P 500 and Nasdaq rise after weekly jobless claims hit 52-year low, PCE inflation jumps

The S&P 500 and Nasdaq rose on Wednesday as technology stocks recovered from some recent losses, as investors digested a deluge of economic data before the holiday market closed.

Investors looked at new Labor Department data showing initial weekly jobless claims fell much more than expected to their lowest level since November 1969, confirming current tight labor market conditions. However, a separate edition showed that personal consumption expenditures accelerated to 5.0% in October, or the fastest rate since 1990, adding to recent indications of rising price pressures.

The 10-year Treasury yield surged to nearly 1.7% amid these additional signs of a strong economic recovery and consistently hot inflation data.

The interest rate hike coincided with a sell-off in technology and growth stocks this week, with the Nasdaq down 0.5% on Tuesday after Monday’s drop of more than 1%.

“At first, the markets were happy with the FOMC decision [for Fed Chair Jerome Powell’s renomination] In a sense, it was a bit of a continuity play. But then the rates started going up, and a lot of people read the price hikes as negative for big company technology,” Stuart Kaiser, UBS head of equity derivatives research, told Yahoo Finance Live. So I think the trade-off we’re going to make is that technology has been a market leader – obviously a solid earnings growth and free cash flow driver for US stocks – but if you think it’s going to be pressured by higher returns, then you end up with some kind of hard catch -22 .

According to other analysts, this week’s market action — with a renewed rotation away from tech stocks and growth in the face of higher prices — could herald the investment environment for the year ahead.

“[Tuesday] It could be an example of what we see more of next year as the Fed moves into a pattern of cashing out of the markets and ending pandemic-era policies, perhaps with year-end interest rate hikes,” Jeffrey Klintop, Charles Schwab Senior Global Investment Strategist, Yahoo Finance Live said. “And that means that stocks rise in value, well, they tend to not perform well in environments of higher interest rates and tighter financial conditions.”

“So you might want to be in those sectors that probably trade closer to their average valuations, and look to lead like finance and energy,” he added. “The only caveat to that is when we see this increase in COVID cases globally, it tends to favor lockdown defenses like technology.”

4:09 pm ET: Tech stocks rebound, S&P 500 and Nasdaq close higher after jobless claims hit 52-year low, PCE inflation jumps

Here are the major moves in the markets as of 4:09 PM ET:

  • Standard & Poor’s 500 (^ Salafist Group for Preaching and Combat): +10.76 (+0.23%) to 4701.46

  • dow (^ DJI): -9.42 (-0.03%) to 35804.38

  • Nasdaq (^ ninth): +70.09 (+0.44%) to 15845.23

  • raw (CL = F.):- $0.25 (-0.32%) to $78.25 per barrel

  • Went (GC = F.): + $4.20 (+0.24%) to $1,788.00 per ounce

  • Treasury for 10 years (^ degeneration): -2.2 basis points to produce 1.6450%

3:50 PM ET: FOMC meeting minutes indicate the central bank is focusing on “flexibility” in order to move forward on the policy path

The November FOMC meeting minutes released on Wednesday afternoon suggested that monetary policy makers are committed to remaining flexible in their policy path forward and will adjust diminishing asset purchases as needed as new economic data rolls in. The central bank had announced in early November that it would begin reducing its asset purchases at a rate of $15 billion per month in both November and December, then reassess the size of future cuts.

The minutes stated that “the committee was prepared to adjust the pace of purchases if required by changes in the economic outlook, and agreed that the post-meeting statement should state this.” “Members agreed that adding this language would recognize the importance of maintaining flexibility to adjust the policy position as appropriate in response to changes in the committee’s expectations of labor market and inflation.”

The November FOMC meeting did not come with an updated “point chart” of individual members’ expectations on interest rates and other economic data. However, Wednesday’s minutes noted, “Members’ near-term expectations for inflation have been revised upwards, with consumer food and energy prices rising faster than expected, and production bottlenecks and recent wage gains seen as putting somewhat greater upward pressure on them.” At prices than expected.”

12:02pm ET: New home sales unexpectedly rose for a straight month in October

Commerce Department data on Wednesday showed new home sales rose 0.4% in October to extend gains after a 7.1% increase in September. Economists were unanimously looking for an unchanged reading last month, according to Bloomberg Consensus data.

“The trend is picking up after a sharp drop in the first half of the year, and the recent uptrend in mortgage applications suggests that increases will be removed over the next few months, with sales reaching 850k or so by January,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in a note on Wednesday. “At the same time, the inventory continues to rise rapidly, unlike the existing home market. The supply in the three months of October was 6.3 months, which is slightly higher than it was before COVID. As a result, the rise in prices now appears to be very exaggerated, We expect a clear slowdown in the first half of next year.”

10:15 a.m. ET: Personal spending and income all top estimates in October though

Personal spending increased in October even amid rising prices, indicating continued consumer strength despite persistent inflation.

The Bureau of Economic Analysis said Wednesday that personal spending, which makes up about two-thirds of US economic activity, rose 1.3% in October compared to September. That was faster than the 0.6% rate recorded for September and the expected 1.0% monthly increase, according to Bloomberg data. Real personal spending also accelerated during the month and beat estimates, rising 0.7% from a 0.3% increase in September.

Meanwhile, personal income rebounded after falling last month, up 0.5% versus the expected 0.2% increase. Income fell 1.0% month-over-month in September, partly after the nationwide, boosted federal jobless benefits were canceled after Labor Day.

10:10 a.m. ET: Personal consumption expenditures have risen at the fastest pace since 1990

The new rate of inflation rose at its fastest rate in more than three decades in October, adding to a raft of data indicating continued inflationary pressures.

Personal consumption expenditures rose 5.0% in October from a year ago, accelerating from a 4.4% rise in September. The latest monthly publication recorded the fastest annual growth rate since 1990.

Excluding volatile food and energy prices, the core PCE deflator rose 4.1% in October, also accelerating from a revised 3.7% increase in September. It was the fastest annual rise in core personal consumption expenditures – the Fed’s favorite measure of inflation – since 1991.

9:30 a.m. ET: Stocks open lower

Here is where the markets were trading before the opening bell:

  • Standard & Poor’s 500 (^ Salafist Group for Preaching and Combat): -21.59 (-0.46%) to 4669.11

  • dow (^ DJI): -209.61 (-0.59%) to 35604.19

  • Nasdaq (^ ninth): -114.56 (-0.73%) to 15658.21

  • raw (CL = F.):- $0.23 (-0.29%) to $78.27 per barrel

  • Went (GC = F.):- $1.40 (-0.08%) to $1,782.40 per ounce

  • Treasury for 10 years (^ degeneration): +1.6 basis points to produce 1.681%

8:45 a.m. ET: New jobless claims hit 52-year lows, Q3 GDP revised up

Economic data Wednesday morning mostly came in stronger than expected, with a new labor market reading easily topping estimates while a second estimate of US economic activity in the third quarter was revised higher.

The Labor Department reported Wednesday that weekly new jobless claims came in at 199,000 for the week ending November 20, which was the lowest level since November 1969, and was much better than the 260,000 new claims that had been expected.

Meanwhile, the Bureau of Economic Analysis released its second estimate of US GDP for the third quarter. Quarterly GDP was revised up to 2.1% annualized for the three months ending in September, or higher than the previously reported 2.0%. However, this still represents a marked slowdown from the 6.7% annual growth rate in the previous quarter.

The improvement from the previous estimate came as personal consumption, the largest component of US economic activity, was revised up to 1.7% from the previously announced 1.6% rate.

7:16AM ET Wednesday: Stock futures drop ahead of economic data

Here are the most important moves in the markets before the opening bell

  • S&P 500 futures contractsES = F.): -13.75 points (-0.29%) to 4,674.75 points

  • Dow futures contractsYM = F.): -119 points (-0.33%) Its price is 35,647.00

  • Nasdaq futures contractsNQ = F.): -59 points (-0.36%) to 16,253.00

  • raw (CL = F.): +0.17 dollars (+0.22%) to 78.67 dollars per barrel

  • Went (GC = F.): + $3.40 (+ 0.19%) to $1,787.20 per ounce

  • Treasury for 10 years (^ degeneration): -0.5 basis points to produce 1.66%

6:16pm ET Tuesday: Stock futures open lower

Here’s where the markets are trading on Tuesday night:

  • S&P 500 futures contractsES = F.): -4.75 points (-0.1%) to 4,683.75 points

  • Dow futures contractsYM = F.): -27 points (-0.08%) to 35739.00

  • Nasdaq futures contractsNQ = F.): 17.25 points (-0.11%) to 16,294.75 points

NEW YORK, NY – NOVEMBER 15: A dealer works on the floor of the New York Stock Exchange (NYSE) on November 15, 2021 in New York City. After positive economic news from China, stocks rose in morning trading on Monday as investors looked forward to retail sales and earnings results from major US companies later this week. (Photo by Spencer Platt/Getty Images)

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter

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