U.S. stocks were mostly flat on the week while markets continue to grapple with recessionary concerns as the global economy adjusts to higher interest rates. This comes on the back of last week’s Federal Reserve meeting where the central bank announced an additional 0.50% (50 basis point) rate hike. Overseas, the Japanese central bank voted to widen its cap on their government bond yields. The announcement comes as the Bank of Japan moves to a more hawkish stance from its easing monetary policy. Elsewhere, China has kept their lending rates unchanged, a move which was in line with expectations.
Retail stocks helped bolster sentiment on Wednesday following surprisingly strong earnings from Nike. Shares of the sports apparel retailer jumped about 10% on Wednesday after beating analysts’ expectations and raising forward guidance. Meanwhile, shares of FedEx rose nearly 6% after beating bottom-line earnings despite slowing revenue growth.
On the data front, November’s new home construction and permits continued to decline as borrowing costs continue to hamper affordability and demand. Housing starts declined 0.5% month over month, coming in slightly better than October’s revised -2.1%. Meanwhile, building permits fell 11.2% in November from the prior month’s revised -3.3%. In addition, the National Association of Home Builders (NAHB) Housing Index unexpectedly declined in December, marking its 12th consecutive month of declines.
Source: GSAM, CNBC, JPMorgan
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