Today was a big day for the stock market. The Consumer Price Index (CPI) for October came out, two of the biggest IPOs of the year were completed on the NYSE, and the Dow Jones Industrial Average gained 4.1%. While the market has experienced some ups and downs, major sectors are all in the green.
Consumer price index (CPI) report for October
The Consumer price index (CPI) report for the month of October will help gauge whether inflation has slowed down or accelerated. The report will include several key components, including the price of housing. The last report indicated that prices had accelerated slightly in August, but the housing market has since softened as mortgage rates have increased. This may affect the October report, but it is still likely to show a modest increase in prices. The report will also include data on energy prices.
The October CPI report will show that prices are continuing to rise, with the headline CPI rising at the fastest pace since 1990. However, the report will show signs of slowing price increases in the food at home category and a modest increase in the price of dining out. The report will also show that energy prices rose slightly from their September lows, but these figures aren’t likely to affect the Fed’s policy. In fact, Fed Chair Powell has said that energy prices are outside of the Fed’s control.
NYSE completed two of largest IPOs of year
In the first half of this year, the U.S. stock market was down more than 20% – the worst start since 1970. The S&P 500 had been in decline for nearly a year, and global inflation pressure led central banks to implement aggressive rate hikes. However, as the year drew to a close, a few mega-IPOs were announced.
In the first half of the year, finance was the most active industry, with over 176 IPOs raising US$25.9 billion. Among the top-performing IPOs of this year were Nu Holdings of Brazil and Kakao Bank of South Korea. These IPOs raised a combined US$2.2 billion, and they illustrated the convergence of finance and technology.
Major market sectors were in the green
The green market today was led by several major sectors. Energy stocks were down, but other sectors were up, including real estate, health care, and utilities. Utilities are often slow performers and offer little growth potential. However, there is a potential for higher returns by investing in green energy. Real estate stocks included equity REITs and real estate developers. Whether you’re looking for a long-term investment or a short-term trade, real estate stocks may offer some attractive growth opportunities.
Dow dipped 92 points
The Dow dipped 92 points today. The S&P 500 and Nasdaq Composite also fell. The drop was triggered by bond yields increasing after the Labor Department released its consumer price index, which showed an 8.3% increase year-over-year in August. Big tech stocks slid more than the rest of the market, led by shares of Apple, Amazon, and Tesla.
Investors are focused on two reports today, Delta Air Lines Inc and Southwest Airlines Co., both of which report their quarterly results. The S&P 500 and Nasdaq are expected to open lower. Investors will also be monitoring Netflix’s report.
Netflix reports better-than-feared earnings
While the company reports better-than-feared earnings, it remains to be seen whether the trend continues. The company lost more than 200,000 paid subscribers in the first three months of the year and is still looking to stabilize its subscriber base. The company also acknowledged a loss of $70 million in severance costs last quarter.
While Netflix’s revenue missed analyst estimates, its earnings and subscriber metrics beat analyst estimates. This could cause the stock to jump significantly following the report. The company’s stock has an unsettling history of wild swings post-earnings.