Stock Market Update

[BRIEFING.COM] The stock market had a somewhat mixed showing today. There was not a lot of conviction on either side of the tape in the early going as participants waited on the FOMC policy decision at 2:00 ET, followed by Fed Chair Powell's press conference at 2:30 ET. 

The FOMC voted unanimously to leave the target range for the fed funds rate unchanged at 4.25-4.50%, which was widely expected by the market. The language of the directive changed to exclude the line that "Inflation has made progress toward the Committee's 2 percent objective..." Instead, the January directive said that "Inflation remains somewhat elevated."

This wasn't too surprising and the market already expected the Fed to remain cautious as the economy and labor market continue to evolve. Fed Chair Powell's remarks at the press conference echoed this. He said "The broad sense of the Committee is that we don't need to be in a hurry to adjust the policy stance."

There was some volatility in stocks and bonds in immediate response to these developments, but markets ultimately settled little changed from levels seen ahead of the 2:00 ET policy announcement. This was an indication that participants didn't see anything truly surprising in today's decision or in the Fed Chair's comments.

The S&P 500 closed 0.5% lower, the Nasdaq Composite declined 0.5%, and the Dow Jones Industrial Average logged a 0.3% decline. The 2-yr note yield, which is most sensitive to changes in the fed funds rate, settled two basis points higher at 4.23% and the 10-yr yield was unchanged at 4.56%.

• Dow Jones Industrial Average: +5.1.% YTD
• S&P Midcap 400: +3.5% YTD
• S&P 500: +2.7% YTD
• Russell 2000: +2.4% YTD
• Nasdaq Composite: +1.7% YTD

Reviewing today's economic data:

• Weekly MBA Mortgage Applications Index -2.0%; Prior 0.1%
• December Adv. Intl. Trade in Goods -$122.1 bln; Prior was revised to -$103.5 bln from -$102.9 bln
• December Adv. Retail Inventories -0.3%; Prior was revised to 0.0% from 0.3%
• December Adv. Wholesale Inventories -0.5%; Prior was revised to -0.1% from -0.2%

Looking ahead to Thursday, market participants receive the following economic data: 

• 8:30 ET: Advance Q4 GDP (Briefing.com consensus 2.3%; prior 3.1%), advance Q4 GDP Deflator (Briefing.com consensus 2.4%; prior 1.9%), Weekly Initial Claims (Briefing.com consensus 221,000; prior 223,000), and Continuing Claims (prior 1.899 mln)
• 10:00 ET: December Pending Home Sales (Briefing.com consensus 0.8%; prior 2.2%)
• 10:30 ET: Weekly natural gas inventories (prior -223 bcf)