Stocks began the week with small gains, and this morning’s futures are suggesting a slightly negative open for the major U.S. indexes. In overnight trading, markets in Asia closed mostly lower. Meanwhile, the major European indexes are mixed. Elsewhere, oil prices have advanced again, with West Texas Intermediate up about 1.7%, to around $93.10 a barrel.
The Federal Reserve continues to occupy center stage for market watchers, with most expecting the lead bank to pause on interest-rate increases at its two-day policy meeting this week. However, traders will be parsing Chairman Jerome Powell’s remarks on Wednesday for any clues as to what comes next. In particular, the Fed will be releasing its projections for where it sees interest rates heading over the next few years, perhaps giving an indication as to when borrowing costs may start coming down. At the moment, the consensus is leaning toward the central bank keeping its overnight lending rate at the current range of 5.25%-5.50% through the remainder of the year.
This morning, we received a couple of economic reports from the housing sector, though neither is likely to have much impact on the Fed’s decision for this week. The Census Bureau announced that housing starts for the month of August came in at an annualized rate of 1.283 million, down 11.3% from the downwardly revised 1.447 million recorded in July, and well below the consensus estimate of 1.440 million. Year over year, the figure was down 14.8% from the August, 2022 rate of 1.505 million. Meanwhile, building permits, which are a more forward-looking indicator, were up 6.9%, to 1.543 million, versus a revised 1.443 million for the month before, and above Wall Street’s call of 1.44 million. However, the figure was down 2.7% compared to August, 2022.
More data points on this sector are due on Thursday, with the National Association of Realtors releasing its figures for existing home sales for the month of August. Expectations are calling for the figure to edge higher to about 4.1 million, compared to July’s 4.07 million.
Summing up Monday’s price moves, the major indexes all eked out gains of less than one-tenth of a percentage point, with the Dow Jones Industrials up six points, the S&P 500 ahead by three points, and the tech-heavy NASDAQ squeezing out a one point advance. – Mario Ferro
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
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