Wall Street rocketed to new records on Wednesday, quieting those who believed the new year rally was on the ropes following Tuesday's failed attempt to go higher. Investors have been more reserved this morning, however, as they contemplate their next move. The S&P 500 futures trade in line with fair value.
Morgan Stanley (MS) reported better-than-expected fourth quarter earnings this morning, joining a group of financial peers that also beat quarterly profit estimates, including JPMorgan Chase (JPM), Wells Fargo (WFC), Citigroup (C), Bank of America (BAC), Goldman Sachs (GS), U.S. Bancorp (USB), and Charles Schwab (SCHW). MS shares are up $0.61, or 1.1%, in pre-market action, trading at $56.95 per share.
Dow components American Express (AXP) and IBM (IBM) will report fourth quarter results following today's closing bell.
In the bond market, U.S. Treasuries are under pressure this morning, extending losses for the week. The yield on the benchmark 10-yr Treasury note is up five basis points at 2.62%--its best level since March 2017. It will be interesting to see if the 10-yr yield can hold steady, or climb even farther, as it challenged 2.60% last week but couldn't break through, and many skeptics have cited relatively low long-term rates as a sign that the U.S. economy is not as healthy as it may appear.
Yields ticked up following this morning's batch of economic data, which included Housing Starts and Building Permits for December, weekly Initial Claims, and the Philadelphia Fed Index for January:
- Housing starts decreased to a seasonally adjusted annualized rate of 1.192 million units in December (Briefing.com consensus 1.280 million), down from a revised 1.299 million units in November (from 1.297 million). Building permits decreased to a seasonally adjusted 1.302 million in December (Briefing.com consensus 1.290 million) from a revised 1.303 million in November (from 1.298 million).
- The latest weekly initial jobless claims count totaled 220,000, while the Briefing.com consensus expected a reading of 251,000. Today's tally was below the unrevised prior week count of 261,000. As for continuing claims, they rose to 1.952 million from a revised count of 1.876 million (from 1.867 million).
- The Philadelphia Fed Survey for January decreased to 22.2 from a revised 27.9 in December (from 26.2) while economists polled by Briefing.com expected a reading of 24.5.
Meanwhile, West Texas Intermediate crude futures are flat at $63.97 per barrel. The American Petroleum Institute reported on Wednesday evening that U.S. crude inventories declined by 5.1 million barrels last week. The official weekly government report will be released at 11:00 AM ET.
Elsewhere, equity indices in the Asia-Pacific region ended Thursday on a mostly higher note, but Japan's Nikkei slipped 0.4%. The Euro Stoxx 50 is flat.