Stocks End Mixed After Fed Minutes, Dollar Gains
5:04 pm Wednesday, November 24th, 2021
Stocks fluctuated after minutes of the Federal Reserve stressed need for flexibility on tapering asset purchases. The dollar climbed and the Treasury yield curve flattened as short-end rates rose.
The information technology sector, which is the market’s most heavily-weighted sector, is up 0.2% after being down 1.1% intraday.
Risk sentiment has been pressured by increasing expectations for the Fed to be more aggressive in tightening policy due to elevated inflation and an improving labor market. Prior to the open, weekly initial claims (199,000) fell to their lowest level since Nov. 15, 1969, and the Fed’s preferred inflation gauge in the PCE Price Index was up 5.0% yr/yr in October.
It’s also worth noting that the economic data today stretched beyond jobless claims and PCE: personal income and spending for October, the final November consumer sentiment report from the University of Michigan, new home sales for October, and the second estimate for Q3 GDP each increased versus their prior readings.
Despite that, the 10-yr yield is down one basis point to 1.65% after brushing up against 1.70% earlier today. The fed-funds-sensitive 2-yr yield is up two basis points to 0.63%. The U.S. Dollar Index is up 0.4% to 96.91.
Separately, shares of Nordstrom (JWN), Gap (GPS), and Autodesk (ADSK) are sinking following their earnings reports. On the other hand, Deere (DE), HP Inc. (HPQ), and Dell (DELL) were some earnings winners.
Initial jobless claims for the week ending November 20 plunged by 71,000 to 199,000 (consensus 265,000), which is the lowest level of initial claims since November 15, 1969. Continuing jobless claims for the week ending November 13 decreased by 60,000 to 2.049 million.
