Stock Market Update

[BRIEFING.COM] The S&P 500 (-0.02%), Nasdaq Composite (-0.1%), and Dow Jones Industrial Average (-0.3%) remain below prior closing levels.

Fed Governor Waller said in an interview on CNBC that he is optimistic that the disinflationary trend will continue, adding that it is reasonable to think rate cuts could happen in the first half of the year if the trend continues. He thinks 3-4 rate cuts are possible this year, depending on data, and he doesn't think tariffs will have a significant impact on inflation. 

The 2-yr yield, which is most sensitive to changes in the fed funds rate, dropped sharply on his remarks, to 4.25% from 4.30%. The 10-yr yield moved to 4.64% from 4.68%. 

The move lower in yields hasn't translated into broad buying in the stock market like it did yesterday. There is some buying interest, though, as evidenced by a 0.1% gain in the Invesco S&P 500 Equal Weight ETF (RSP).

Separately, the NAHB Housing Market Index rose to 47 in January (Briefing.com consensus 45) from 46 in December. November Business Inventories rose 0.1% (Briefing.com consensus 0.1%) following a flat reading in October (revised from 0.1%).