Dynamics of the US stock markets

Trading on January 16 on the American stock markets ended with different dynamics. The S&P 500 index declined 0.21%, the NASDAQ lost 0.89%, while the Dow Jones rose 0.25% and the Russell 2000 rose 0.15%. 

Positive news from Taiwan Semiconductor (TSM) and data on the consumer price index (CPI) did not provide sufficient momentum for steady growth. The negative dynamics of shares of large technology companies and the IT sector put pressure on the market. At the same time, most other industries ended the day in positive territory, and the equally weighted S&P 500 index increased by 0.8%.

The retail sales index for December increased by 0.44% mom, with a forecast of 0.6%. The core index, excluding car and fuel sales, rose 0.39% against expectations of 0.4%. These data can be considered neutral, as they correspond to the average figures for the last six months and confirm the existing trends in consumer spending. This makes it possible to forecast US GDP growth for the fourth quarter in the range of 2.3–2.4% y/y.

The number of initial applications for unemployment benefits amounted to 217 thousand, which is slightly higher than the consensus forecast of 213 thousand. The dynamics could be affected by a one-time effect from the fires in California. Fed Board member Christopher Waller confirmed the possibility of a rate cut in March and lowered concerns about the impact of higher import duties on inflation. The head of the Federal Reserve Bank of Chicago, Austan Goolsbee, expressed confidence in the stabilization of the labor market.