Market Volatility Continues as Earnings Season Heats Up
Stocks Struggle to Build Momentum
US stocks experienced a mixed day on Thursday, with major indexes struggling to maintain the previous day’s surge. The S&P 500 fell below the flatline, while the tech-heavy Nasdaq Composite dipped 0.3%. The Dow Jones Industrial Average also fell 0.2%. This volatility comes on the heels of a major one-day rally sparked by a surprise easing in consumer inflation.
Earnings Season Takes Center Stage
Bank of America’s fourth-quarter profit more than doubled, thanks to a Wall Street dealmaking revival that has also boosted earnings at its rivals. Morgan Stanley’s stock rose after it posted a surge in quarterly profit. However, UnitedHealth’s fourth-quarter revenue fell short of estimates, dented by weakness in its health insurance unit.
Senate Hearing for Treasury Secretary Nominee
The Senate Finance Committee hearing for President-elect Donald Trump’s nominee for Treasury Secretary, Scott Bessent, took focus on Thursday. Lawmakers questioned Bessent on policies surrounding tariffs and Republican initiatives for 2025 tax and spending plans.
Housing Market Shows Signs of Optimism
Despite elevated mortgage rates, builders are starting the year with more optimism than in the end of 2024. The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index rose to 47 in January, up one point from December and higher than economists’ estimates.
Retail Sales Growth Slows
Retail sales grew at a slower pace than expected in December, rising 0.4% versus expectations of 0.6%. Meanwhile, weekly jobless claims rose more than expected to 217,000.
Economic Data and Earnings
Other notable economic data releases included the import price index, initial jobless claims, and import & export prices. Earnings reports from J.B. Hunt, PNC, Taiwan Semiconductor, and U.S. Bancorp also made headlines.
Market Expectations
Markets expect the Federal Reserve to likely leave rates unchanged this month, especially after fresh inflation data released Wednesday showed some signs of easing. Traders have now ramped up bets that the Federal Reserve lowers rates before July, reversing the pile-out that was sparked by the stronger-than-expected December jobs report.
Leave a Reply