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Wall Street closed virtually flat on Friday, torn between market sentiment and hawkish comments from Fed officials. Treasury yields fell to nearly two-month lows. All of the three major stock indexes ended marginally in the green.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) remained virtually flat, gaining 1.81 points to close at 34,947.28. Fifteen components of the 30-stock index ended in negative territory, while 15 ended in positive.
The tech-heavy Nasdaq Composite also remained flat, rising 11.81 points to close at 14,125.48.
The S&P 500 added 5.78 points, or 0.1%, to close at 4,514.02. Six out of the 11 broad sectors of the benchmark index closed in the green. The Energy Select Sector SPDR (XLE), the Consumer Discretionary Select Sector SPDR (XLY) and the Industrials Select Sector SPDR (XLI) advanced 2.1%, 0.7% and 0.6%, respectively, while the Technology Select Sector SPDR (XLK) declined 0.2%.
The fear-gauge CBOE Volatility Index (VIX) decreased 3.6% to 13.80. A total of 10.1 billion shares were traded on Friday, lower than the last 20-session average of 11 billion. Advancers outnumbered decliners on the NYSE by a 2.65-to-1 ratio. On the Nasdaq, advancing issues led decliners by 2.16-to-1.
Fed Continues to Send Hawkish Signals
Even as market participants over the past few weeks have been pricing in the possibility that we may have already reached the end of the Fed’s rate hike cycle, and various economic numbers have certainly been supporting the sentiment, comments coming in from the central bank’s officials have continued to be hawkish.
In a central banking conference in Frankfurt, Germany, San Francisco Fed president Mary Daly said on Friday that the Fed might take further time and formulate more policies to tame inflation. She said that the Fed is not certain it's done enough to get inflation on track toward its 2% goal, but the full effect of its tight monetary policy might be seen in the months ahead.
Joining in was Boston Fed president Susan Collins, who, in a television interview, said that the Fed must be "patient and resolute, and I wouldn't take additional firming off the table." Reiterating that inflation was still too high, Collins mentioned that the central bank needs to stay its source.
Officials no less than Fed Chair Jerome Powell have continued to warn that although we are currently experiencing a rate hike pause, the ordeal is yet to be over. Investors, over the past month, have tried to ignore this hawkish stance from the Fed and the market has risen. However, with minutes from the last Fed meeting due to be out on Tuesday, they will be on the lookout for the central bank’s future outlook.
Treasury Yields Fall to a 2-Month Low
U.S. Treasury yields have been declining since the start of November. The phenomenon continued on Friday, with the yield on the benchmark 10-year note briefly falling to the lowest level in two months.
With economic data suggesting that inflation has resumed its path southward, yields have nosedived since touching 16-year highs in late October. This has boosted expectations from the market that the Fed may be done with its rate hiking cycle. Energy and Consumer Discretionary became two of the biggest gainers in the session.
The U.S. Census Bureau and the U.S. Department of Housing and Urban Development jointly reported that building permits for October had come in at a seasonally adjusted rate of 1,487,000 units. The rate for September was revised down to 1,471,000 from the previously reported 1,473,000.
Housing Starts came in at 1,372,000 units for October. The number for September was revised down to 1,346,000 from the previously reported 1,358,000.
Weekly Roundup
All of the three widely followed indexes closed out last week with gains. The tech-heavy Nasdaq Composite, the S&P 500 and the Dow Jones Industrial Average jumped 2.4%, 2.2% and 1.9%, respectively, marking three straight weeks of gains for all three indexes. For the S&P 500 and the Dow, it was their longest weekly gaining streak since July. For the Nasdaq, it marked the longest winning streak since June.
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Stock Market News for Nov 20, 2023
Wall Street closed virtually flat on Friday, torn between market sentiment and hawkish comments from Fed officials. Treasury yields fell to nearly two-month lows. All of the three major stock indexes ended marginally in the green.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) remained virtually flat, gaining 1.81 points to close at 34,947.28. Fifteen components of the 30-stock index ended in negative territory, while 15 ended in positive.
The tech-heavy Nasdaq Composite also remained flat, rising 11.81 points to close at 14,125.48.
The S&P 500 added 5.78 points, or 0.1%, to close at 4,514.02. Six out of the 11 broad sectors of the benchmark index closed in the green. The Energy Select Sector SPDR (XLE), the Consumer Discretionary Select Sector SPDR (XLY) and the Industrials Select Sector SPDR (XLI) advanced 2.1%, 0.7% and 0.6%, respectively, while the Technology Select Sector SPDR (XLK) declined 0.2%.
The fear-gauge CBOE Volatility Index (VIX) decreased 3.6% to 13.80. A total of 10.1 billion shares were traded on Friday, lower than the last 20-session average of 11 billion. Advancers outnumbered decliners on the NYSE by a 2.65-to-1 ratio. On the Nasdaq, advancing issues led decliners by 2.16-to-1.
Fed Continues to Send Hawkish Signals
Even as market participants over the past few weeks have been pricing in the possibility that we may have already reached the end of the Fed’s rate hike cycle, and various economic numbers have certainly been supporting the sentiment, comments coming in from the central bank’s officials have continued to be hawkish.
In a central banking conference in Frankfurt, Germany, San Francisco Fed president Mary Daly said on Friday that the Fed might take further time and formulate more policies to tame inflation. She said that the Fed is not certain it's done enough to get inflation on track toward its 2% goal, but the full effect of its tight monetary policy might be seen in the months ahead.
Joining in was Boston Fed president Susan Collins, who, in a television interview, said that the Fed must be "patient and resolute, and I wouldn't take additional firming off the table." Reiterating that inflation was still too high, Collins mentioned that the central bank needs to stay its source.
Officials no less than Fed Chair Jerome Powell have continued to warn that although we are currently experiencing a rate hike pause, the ordeal is yet to be over. Investors, over the past month, have tried to ignore this hawkish stance from the Fed and the market has risen. However, with minutes from the last Fed meeting due to be out on Tuesday, they will be on the lookout for the central bank’s future outlook.
Treasury Yields Fall to a 2-Month Low
U.S. Treasury yields have been declining since the start of November. The phenomenon continued on Friday, with the yield on the benchmark 10-year note briefly falling to the lowest level in two months.
With economic data suggesting that inflation has resumed its path southward, yields have nosedived since touching 16-year highs in late October. This has boosted expectations from the market that the Fed may be done with its rate hiking cycle. Energy and Consumer Discretionary became two of the biggest gainers in the session.
Consequently, shares of Marathon Oil Corporation (MRO - Free Report) and Warner Bros. Discovery, Inc. (WBD - Free Report) rose 3.3% and 3.8%, respectively. Each carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Economic Data
The U.S. Census Bureau and the U.S. Department of Housing and Urban Development jointly reported that building permits for October had come in at a seasonally adjusted rate of 1,487,000 units. The rate for September was revised down to 1,471,000 from the previously reported 1,473,000.
Housing Starts came in at 1,372,000 units for October. The number for September was revised down to 1,346,000 from the previously reported 1,358,000.
Weekly Roundup
All of the three widely followed indexes closed out last week with gains. The tech-heavy Nasdaq Composite, the S&P 500 and the Dow Jones Industrial Average jumped 2.4%, 2.2% and 1.9%, respectively, marking three straight weeks of gains for all three indexes. For the S&P 500 and the Dow, it was their longest weekly gaining streak since July. For the Nasdaq, it marked the longest winning streak since June.