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Pre-markets are trading in red following Fed’s June FOMCmeeting decision. On Jun 14, the central bank decided to keep the Fed fund rate unchanged at the existing rate of 5-5.25%. However, Powell also mentioned that more rate hikes are likely this year.
The Fed’s current “dot-plot” shows that the mean expectation of officials is for another 50-basis point raise in the benchmark interest rate. This implies, two more rate hikes of 25 basis points each within 2023. The terminal interest rate is at present 5.6%, instead of 5.125%, anticipated after the May FOMC meeting. No rate cut is expected this year.
On the other hand, on Jun 15, the European Central Bank (ECB) has raised its main rate by 25 basis points to a 22-year high of 3.5%. The ECB has projected that the headline inflation will stay at 5.4% this year, 3% in 2024 and 2.2% in 2025. Moreover, the ECB has estimated Eurozone GDP to grow 0.9% in 2023 and 1.5% in 2024.
On the earnings front, U.S.-based big homebuilder Lennar Corp. (LEN - Free Report) came up with quarterly earnings of $2.94 per share, beating the Zacks Consensus Estimate of $2.32 per share. The company posted revenues of $8.05 billion for the quarter ended May 2023, surpassing the Zacks Consensus Estimate by 10.48%.
A series of key economic data was released today before the opening bell. Weekly jobless claims remained same at 262,000 for the week ended Jun 10, beating the consensus estimate of 245,000. This was the highest level of initial claims since the week ended Oct 30, 2021. The previous week’s data was revised upward by 1,000 to 262,000 from 261,000 reported earlier. The 4-week moving average was 246,750, an increase of 9,250 from the previous week's revised average, marking its highest level since the week ended Nov 20, 2021.
Continuing claims — people who already received government unemployment benefit and run a week behind the headline number — came in at 1.775 million for the week ended Jun 3. This compares to a revised 1.755 million in the prior week. The 4-week moving average was 1,778,250, a decrease of 6,000 from the previous week's revised average.
The Department of Commerce reported that Retail Sales increased 0.3% month-over-month in May, beating the consensus estimate of remaining flat. In April, retail sales increased 0.4% month-over-month. Year over year, retail sales increased 1.6% in May. This implies, that U.S. consumer spending is healthy despite elevated inflation and higher borrowing costs.
However, core Retail Sales (excluding auto sales) increased 0.1% month-over-month in May, missing the consensus estimate of an increase of 0.2%. In April, core retail sales increased 0.4% month over month.
The NY Empire State Index came in at +6.6 in June, surprisingly, buoyed by higher new orders and strong shipment. The consensus estimate was -16. May data was -31.8. The data shows business activities increased to some extent in New York state.
Industrial Production decreased 0.2% month-over-month in May in contrast to the consensus estimate of an increase of 0.1%. The metric increased 0.5% in April. Year over year, industrial production decreased 0.2% in May too, compared with an increase of 0.2% in April.
Capacity Utilization came in at 79.6% in May, in line with the consensus estimate. The metric for April increased marginally to 79.8% from 79.7% reported earlier.
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Initial Claims Come in Unchanged From Last Week
Pre-markets are trading in red following Fed’s June FOMC meeting decision. On Jun 14, the central bank decided to keep the Fed fund rate unchanged at the existing rate of 5-5.25%. However, Powell also mentioned that more rate hikes are likely this year.
The Fed’s current “dot-plot” shows that the mean expectation of officials is for another 50-basis point raise in the benchmark interest rate. This implies, two more rate hikes of 25 basis points each within 2023. The terminal interest rate is at present 5.6%, instead of 5.125%, anticipated after the May FOMC meeting. No rate cut is expected this year.
On the other hand, on Jun 15, the European Central Bank (ECB) has raised its main rate by 25 basis points to a 22-year high of 3.5%. The ECB has projected that the headline inflation will stay at 5.4% this year, 3% in 2024 and 2.2% in 2025. Moreover, the ECB has estimated Eurozone GDP to grow 0.9% in 2023 and 1.5% in 2024.
On the earnings front, U.S.-based big homebuilder Lennar Corp. (LEN - Free Report) came up with quarterly earnings of $2.94 per share, beating the Zacks Consensus Estimate of $2.32 per share. The company posted revenues of $8.05 billion for the quarter ended May 2023, surpassing the Zacks Consensus Estimate by 10.48%.
A series of key economic data was released today before the opening bell. Weekly jobless claims remained same at 262,000 for the week ended Jun 10, beating the consensus estimate of 245,000. This was the highest level of initial claims since the week ended Oct 30, 2021. The previous week’s data was revised upward by 1,000 to 262,000 from 261,000 reported earlier. The 4-week moving average was 246,750, an increase of 9,250 from the previous week's revised average, marking its highest level since the week ended Nov 20, 2021.
Continuing claims — people who already received government unemployment benefit and run a week behind the headline number — came in at 1.775 million for the week ended Jun 3. This compares to a revised 1.755 million in the prior week. The 4-week moving average was 1,778,250, a decrease of 6,000 from the previous week's revised average.
The Department of Commerce reported that Retail Sales increased 0.3% month-over-month in May, beating the consensus estimate of remaining flat. In April, retail sales increased 0.4% month-over-month. Year over year, retail sales increased 1.6% in May. This implies, that U.S. consumer spending is healthy despite elevated inflation and higher borrowing costs.
However, core Retail Sales (excluding auto sales) increased 0.1% month-over-month in May, missing the consensus estimate of an increase of 0.2%. In April, core retail sales increased 0.4% month over month.
The NY Empire State Index came in at +6.6 in June, surprisingly, buoyed by higher new orders and strong shipment. The consensus estimate was -16. May data was -31.8. The data shows business activities increased to some extent in New York state.
Industrial Production decreased 0.2% month-over-month in May in contrast to the consensus estimate of an increase of 0.1%. The metric increased 0.5% in April. Year over year, industrial production decreased 0.2% in May too, compared with an increase of 0.2% in April.
Capacity Utilization came in at 79.6% in May, in line with the consensus estimate. The metric for April increased marginally to 79.8% from 79.7% reported earlier.