Stock Market Update

[BRIEFING.COM] The final session of the week has been a solid one so far. The S&P 500 (+0.4%) and Dow Jones Industrial Average (+0.7%) pushed further into record territory, the Nasdaq Composite sports a 0.2% gain, and the Russell 2000 is outperforming, trading 1.6% higher.

Leadership from the financial sector (+1.9%), which houses 13% of the S&P 500 in terms of market cap, has helped boost the broader marker after earnings results from some big names in the space.

JPMorgan Chase (JPM 222.84, +10.00, +4.7%), Wells Fargo (WFC 61.23, +3.48, +6.0%), and BlackRock (BLK 978.30, +22.71, +2.4%) are among the names that reported earnings. Bank of America (BAC 41.89, +1.92, +4.8%) is another influential winner in the sector after news that 10% owner Berkshire Hathaway's Warren Buffett sold roughly $382 million worth of BAC shares.

The positive bias also reflects a positive response to this morning's data. The September Producer Price Index and preliminary consumer sentiment data from October have led the market to believe that the Fed won't stop cutting rates.

Rate cut expectations are little changed from yesterday. The likelihood of a 25 basis points rate cut at the November FOMC meeting is at 85.9% now versus 83.3% yesterday, down slightly from 97.4% a week ago, according to the CME FedWatch Tool.

The Treasury market had a muted initial response to this morning's data, but buying has picked up recent action, which is supportive for equities. The 2-yr yield is down six basis points to 3.94% and the 10-yr yield is down three basis points to 4.07%.

Tesla (TSLA 219.70, -19.01, -8.0%) is a notable exception in today's everything rally after a disappointing reveal of its robotaxi. This sharp loss has contributed to the activity in the consumer discretionary sector (-0.2%).

The information technology sector is the only other sector trading lower while the remaining nine sport gains ranging from 0.3% to 1.8%.

Reviewing today's economic data:

• September PPI 0.0% (Briefing.com consensus 0.1%); Prior 0.2%, September Core PPI 0.2% (Briefing.com consensus 0.2%); Prior 0.3%
  • The key takeaway from the report is that producers are still tangling with elevated prices, excluding food and energy, which means the Fed is still going to have to tangle with inflation data that will make it harder at this stage to justify aggressive rate cuts.
• October Univ. of Michigan Consumer Sentiment - Prelim 68.9 (Briefing.com consensus 70.1); Prior 79.1
  • The key takeaway from the report is that consumer sentiment picked up in September, and has been picking up as inflation pressures have moderated.