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Wall Street continues its decline on Friday following the Fed Chairman’s hawkish statement on rate cut. Moreover, President-elect Donald Trump’s decision to elect a vaccine skeptic as the head of the Health and Human Services department. Economic data were mixed. All three major stock indexes ended in negative territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) fell 0.7% or 305.87 points to close at 43,444,9. At intraday high, the blue-chip index was down more than 400 points. Notably, 19 components of the 30-stock index ended in negative territory while 11 in positive zone.
The tech-heavy Nasdaq Composite finished at 18,680.12, tumbling 2.2% or 427.53 points due to weak performance by corporate giants. The tech-laden index closed below the crucial 19,000 level for the first time since Nov 6.
The S&P 500 slid 1.3% to finish at 5,870.62. Eight out of 11 broad sectors of the broad-market index ended in negative territory while three in positive zone. The Communication Services Select Sector SPDR (XLC), the Health Care Select Sector SPDR (XLV) and the Technology Select Sector SPDR (XLK) plunged 2%, 1.9% and 2.5%, respectively. On the other hand, the Utilities Select Sector SPDR (XLU) advanced 1.5%.
The fear-gauge CBOE Volatility Index (VIX) jumped 12.8% to 16.14, its highest since Nov 5. A total of 15.47 billion shares were traded on Friday, higher than the last 20-session average of 13.94 billion. Decliners outnumbered advancers on the NYSE by a 1.89-to-1 ratio. On Nasdaq, a 2.51-to-1 ratio favored declining issues.
Hawkish Statement from Powell
On Nov 14, in his speech to business leaders in Dallas, the Fed Chairman Jerome Powell said that the central bank is in no hurry to cut the benchmark lending rate further. The Fed reduced the Fed fund rate by 75 basis points in two consecutive FOMC meetings in September and November. The Fed fund rate is currently in the range of 4.50-4.75% compared with a 23-year high of 5.25-5.5% in mid-September.
Following Powell’s speech, the CME FedWatch interest rate derivative tool shows a 62% probability that the central bank will further reduce interest rate by another 25 basis points in December. This probability was 82.5% just before Powell’s statement. Market participants are still hopeful that the Fed will cut the lending rate by a full 1% in 2024.
Vaccine Stocks Tumble
President-elect Donald Trump nominated Robert F. Kennedy Jr., a prominent vaccine skeptic, as the Head of the Department of Health and Human Services. Following the news, stock prices of major vaccine manufacturers tumbled. Shares of Pfizer Inc. (PFE - Free Report) , Amgen Inc. (AMGN - Free Report) and Moderna Inc. (MRNA - Free Report) plummeted 4.7%, 4.2% and 7.3%, respectively. Pfizer currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Economic Data
The Department of Commerce Reported that retail sales in October rose 0.4%, in line with the consensus estimate. The metric for September was revise upward to 0.8% from 0.4% reported earlier. Year over year, retail sales were up 2.6% in October.
Core retail sales (excluding auto) in October increased 0.1%, missing the consensus estimate of 0.3%. The metric for September was revised upward to 1% from 0.5% reported earlier. Retail sales of control group (excluding several volatile items), which factors into GDP estimation, decreased 0.1% in contrast to the consensus estimate of an increase of 0.3%. However, revisions showed sales in both groups increased 1.2% in September, up from 0.7% reported earlier.
Industrial production contracted 0.3% in October, better-than-the consensus mark of a contraction of 0.4%. The metric for September was revised downward to a decrease of 0.5% from a fall of 0.3% reported earlier. Manufacturing output fell 0.5% while both mining and utilities output rose 0.3% and 0.7%, respectively. Capacity utilization fell to 77.1% in October, marginally below the consensus estimate of 77.2%. The metric for September was revised marginally downward to 77.4% from 77.5% reported earlier.
Business inventories increased 0.1% in September, missing the consensus mark of 0.2%. The metric for August was 0.3%. The New York Empire State manufacturing index soared to 31.2% in November, marking its highest level since December 2021. The consensus estimate was 0%. The metric for October was -11.9%.
Weekly Roundup
Last week was a disappointing one for Wall Street. The three major stock indexes – the Dow, the S&P 500 and the Nasdaq Composite – were down 1.2%, 2.1% and 3.2%, respectively. Concerns about Trump’s economic policies and their impact on inflation and hawkish statement by Powell on future rate cut dented investors confidence on risky assets like equities.
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Stock Market News for Nov 18, 2024
Wall Street continues its decline on Friday following the Fed Chairman’s hawkish statement on rate cut. Moreover, President-elect Donald Trump’s decision to elect a vaccine skeptic as the head of the Health and Human Services department. Economic data were mixed. All three major stock indexes ended in negative territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) fell 0.7% or 305.87 points to close at 43,444,9. At intraday high, the blue-chip index was down more than 400 points. Notably, 19 components of the 30-stock index ended in negative territory while 11 in positive zone.
The tech-heavy Nasdaq Composite finished at 18,680.12, tumbling 2.2% or 427.53 points due to weak performance by corporate giants. The tech-laden index closed below the crucial 19,000 level for the first time since Nov 6.
The S&P 500 slid 1.3% to finish at 5,870.62. Eight out of 11 broad sectors of the broad-market index ended in negative territory while three in positive zone. The Communication Services Select Sector SPDR (XLC), the Health Care Select Sector SPDR (XLV) and the Technology Select Sector SPDR (XLK) plunged 2%, 1.9% and 2.5%, respectively. On the other hand, the Utilities Select Sector SPDR (XLU) advanced 1.5%.
The fear-gauge CBOE Volatility Index (VIX) jumped 12.8% to 16.14, its highest since Nov 5. A total of 15.47 billion shares were traded on Friday, higher than the last 20-session average of 13.94 billion. Decliners outnumbered advancers on the NYSE by a 1.89-to-1 ratio. On Nasdaq, a 2.51-to-1 ratio favored declining issues.
Hawkish Statement from Powell
On Nov 14, in his speech to business leaders in Dallas, the Fed Chairman Jerome Powell said that the central bank is in no hurry to cut the benchmark lending rate further. The Fed reduced the Fed fund rate by 75 basis points in two consecutive FOMC meetings in September and November. The Fed fund rate is currently in the range of 4.50-4.75% compared with a 23-year high of 5.25-5.5% in mid-September.
Following Powell’s speech, the CME FedWatch interest rate derivative tool shows a 62% probability that the central bank will further reduce interest rate by another 25 basis points in December. This probability was 82.5% just before Powell’s statement. Market participants are still hopeful that the Fed will cut the lending rate by a full 1% in 2024.
Vaccine Stocks Tumble
President-elect Donald Trump nominated Robert F. Kennedy Jr., a prominent vaccine skeptic, as the Head of the Department of Health and Human Services. Following the news, stock prices of major vaccine manufacturers tumbled. Shares of Pfizer Inc. (PFE - Free Report) , Amgen Inc. (AMGN - Free Report) and Moderna Inc. (MRNA - Free Report) plummeted 4.7%, 4.2% and 7.3%, respectively. Pfizer currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Economic Data
The Department of Commerce Reported that retail sales in October rose 0.4%, in line with the consensus estimate. The metric for September was revise upward to 0.8% from 0.4% reported earlier. Year over year, retail sales were up 2.6% in October.
Core retail sales (excluding auto) in October increased 0.1%, missing the consensus estimate of 0.3%. The metric for September was revised upward to 1% from 0.5% reported earlier. Retail sales of control group (excluding several volatile items), which factors into GDP estimation, decreased 0.1% in contrast to the consensus estimate of an increase of 0.3%. However, revisions showed sales in both groups increased 1.2% in September, up from 0.7% reported earlier.
Industrial production contracted 0.3% in October, better-than-the consensus mark of a contraction of 0.4%. The metric for September was revised downward to a decrease of 0.5% from a fall of 0.3% reported earlier. Manufacturing output fell 0.5% while both mining and utilities output rose 0.3% and 0.7%, respectively. Capacity utilization fell to 77.1% in October, marginally below the consensus estimate of 77.2%. The metric for September was revised marginally downward to 77.4% from 77.5% reported earlier.
Business inventories increased 0.1% in September, missing the consensus mark of 0.2%. The metric for August was 0.3%. The New York Empire State manufacturing index soared to 31.2% in November, marking its highest level since December 2021. The consensus estimate was 0%. The metric for October was -11.9%.
Weekly Roundup
Last week was a disappointing one for Wall Street. The three major stock indexes – the Dow, the S&P 500 and the Nasdaq Composite – were down 1.2%, 2.1% and 3.2%, respectively. Concerns about Trump’s economic policies and their impact on inflation and hawkish statement by Powell on future rate cut dented investors confidence on risky assets like equities.