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4:01 p.m. ET: Stocks closer higher after Fed leaves rates unchanged
Here’s where markets settled Wednesday at the end of regular equity trading Wednesday:
S&P 500 (^GSPC): +0.29%, or 9.11 points
Dow (^DJI): +0.11%, or 29.58 points
Nasdaq (^IXIC): +0.44%, or 37.87 points
10-year Treasury yield (^TNX): -3.3 bps to 1.798%
Gold (GC=F): +0.76% to $1,473.70 per ounce
2:00 p.m. ET: Fed leaves rates unchanged, markets hover
In its final meeting of 2019 and the decade, the Federal Reserve left interest rates unchanged. The Fed also signaled it may continue to leave rates at its target range of between 1.5% and 1.75% throughout 2020.
Markets expected the Fed to leave rates unchanged, and markets hovered following the decision.
12:00 p.m. ET: Disney+ draws in 22 million downloads since launch
According to mobile application tracker Apptopia, Disney Plus has been downloaded over 22 million times in the weeks since it launched in November. In the initial days, the new streaming platform hit over 10 million. The platform’s first original series, “The Mandalorian,” has become a huge hit for Disney as the streaming wars heat up.
Disney’s stock (DIS) was up modestly in Wednesday trading, above $147.
11:45 a.m. ET: Chinese tariffs undercut local economies: Study
New data has examined at the cost of China tariffs on U.S. goods, and the impact isn’t pretty:
Tariffs slapped by China on U.S. products cost the most affected communities billions of dollars in lost auto sales in 2018 as the hit to local incomes undercut household spending, according to an analysis released on Wednesday by the National Bureau of Economic Research
Those communities also saw slower job growth, according to Michael Waugh, an associate professor of economics at New York University's Stern School of Business and the study's author.
11:10 a.m. ET: How Baby Yoda could take down Netflix
Well, not exactly. But Needham analyst Laura Martin — whose downgrade of Netflix (NFLX) to Underperform triggered a 3.2% swoon on Tuesday — explained to Yahoo Finance why rising competition from new streaming services could cause the streaming giant to lose 4 million U.S. subscribers in 2020:
“People churn more. People turn off Netflix while they watch ‘The Mandalorian’ on Disney+ (DIS), or while they watch ‘The Morning Show’ on Apple (AAPL), and then they go back to Netflix,” Martin told Yahoo Finance’s On the Move,
“But all you need is about three months more churn by 30% of their people, and you lose 4 million subs worth of revenue in the U.S.”
Among the new crop of streaming originals, Disney+’s “Mandalorian” has by far benefited from the most buzz, thanks largely to the instant viral fame of a diminutive puppet that closely resembles “Star Wars’” Yoda that’s touched off wild speculation about his origin.
11:00 a.m. ET: Oil down after US inventories surprise to the upside
Crude is down 1.7% on the day after U.S. oil inventories showed a surprise build, underscoring ample supply amid weak demand. Despite OPEC’s decision last week to cut production, analysts see oil’s upside capped with global growth weaker and the trade war still unresolved.
10:55 a.m. ET: Business confidence fell in Q4, BRT says
Corporate leaders grew less optimistic about the U.S. economy for the seventh straight quarter, according to a new survey released by the Business Roundtable (BRT). The group issues its CEO Economic Outlook survey for the fourth quarter.
The group’s economic outlook index decreased by 2.5 points to 76.7 — which remains below the Index’s historical average of 82.7. A 50-point threshold has historically indicated the onset of recession.
According to JPMorgan Chase CEO Jamie Dimon, who chairs the BRT:
“There has been progress in several policy areas that has strengthened the U.S. economy from top to bottom—but more progress needs to be made on free and fair trade agreements. Such progress—combined with other policies that encourage growth, innovation and opportunity—will better serve all Americans and put the U.S. economy on a stronger and more sustainable path.”
10:35 a.m. ET: JPMorgan: ‘The profit cycle is at an inflection’
Appreciation in the S&P 500 next year will be driven by easier monetary policy, trade deal progress and positive sentiment around the 2020 elections, according to JPMorgan strategist Dubravko Lakos-Bujas.
“Next year, we see the S&P 500 rising further to 3,400 on global cycle recovery, partial trade deal, pro-growth election-year rhetoric and neutral investor positioning,” he said.
A roundup of Wall Street’s calls for next year can be found here.
10:30 a.m. ET: Amazon deliveries reportedly down, ShipMatrix data says
A big selling point of ordering from Amazon (AMZN) is the convenience and quick delivery times, especially when compared to conventional methods of transport. But new data suggests the retail giant could be faltering under the demands of the holiday shopping season:
Amazon.com Inc van drivers' on-time delivery rate fell to 93.7% for the Cyber Monday week from 98.2% during the Thanksgiving week, consulting firm ShipMatrix said on Wednesday.
The ShipMatrix figures come as Amazon ramps up its Prime One-Day delivery efforts, which have driven up shipping and fulfillment costs.
10:15 a.m. ET: A bull market in bullion?
Goldman Sachs raised eyebrows with a note detailing how wealthy investors were snapping up physical gold, which performs well during times of loose monetary policy. They’re not the only ones: Central banks have been big bullion buyers for at least a year
Now, Paul Schatz, Heritage Capital president, tells Yahoo Finance’s On The Move that gold will add at least another $1000 from current levels, hitting $2,500 - $3,000 per ounce in the next decade, “because the climate—the landscape for gold is so hugely supportive.”
In early U.S. dealings, spot gold (GC=F) changed hands around $1,472.
10:10 a.m. ET: Getting underneath the hood of rising price pressures
November’s CPI was higher than expected, which means economists are wondering how bothered the Fed will be by growing inflationary pressures in an economy that’s growing slowly, but jobs are plentiful and labor costs are creeping up.
That’s not the only thing driving up prices, Bleakley Advisory’s Peter Boockvar notes:
Rent of a Primary Residence rose .3% m/o/m and is up 3.7% y/o/y. Owners Equivalent Rent, which understates rent inflation, rose .2% m/o/m and 3.3% y/o/y. Medical care costs continue to be a growing problem as prices rose .3% m/o/m and 4.2% y/o/y but don’t worry, the Fed’s PCE gauge says there is little healthcare inflation because Medicare and Medicaid reimbursement rates are price fixing things lower. But if you actually pay out of pocket with a deductible or pay for insurance, then you are experiencing a problem with healthcare inflation that the CPI is capturing. As for details, health insurance costs rose 1.5% m/o/m and 20.2% y/o/y.
Meanwhile, JPMorgan’s Daniel Silver says Thursday’s producer price index (PPI) should be a bit more revelatory, but the firm is tracking November core PCE inflation at 0.16%.
10:00 a.m. ET: It’s been a rough year for CEOs
A report out today out from Challenger, Gray & Christmas finds that CEO turnover is at a record high so far this year, Yahoo Finance editor Erin Fuchs writes:
It seems like every week there’s another high-profile CEO exit — from Nike to WeWork to Expedia, United Airlines, and Foursquare. Just this week, the CEO of Away stepped down following a report from The Verge alleging the direct-to-consumer luggage company has a toxic culture.
Experts attribute the exodus to a combination of factors, including the rise of activist investors pushing for a shift in direction at public companies. Moreover, the public has new, more stringent expectations for CEOs’ behavior. Behavior that might have been acceptable in decades past — like dating a subordinate — won’t fly today, especially in the wake of the #MeToo Movement.
“What’s acceptable behavior and what’s not acceptable behavior has changed enormously,” Margarethe Wiersema, a professor at the business school at the University of California, Irvine, told Yahoo Finance. “The expectations have shifted. What you might call the norms of behavior have shifted.”
9:30 a.m. ET: Stocks orbit breakeven as Fed decision looms
Here’s where major benchmarks began trading:
S&P 500 (^GSPC): flat, or +1.70 points
Dow (^DJI): -0.17%, or -48.17 points
Nasdaq (^IXIC): flat, or +11.03 points
Crude (^CL=F): -0.32% to $59.05
10-year Treasury yield (^TNX): flat to 1.833%
Gold (GC=F): flat to $1,471.90 per ounce
Separately, a surprise jump in consumer prices last month drew the market’s attention. U.S. consumer prices rose more than expected in November, which may bolster the Fed’s decision to keep rates on hold if inflation pressures are stirring.
Most economists expect the central bank to hold the line on rates, but will be parsing the Fed’s language carefully for hints about the outlook. Capital Economics wrote on Wednesday that:
The continued stability of unit labour costs growth suggests that core inflation will ease over the coming quarters. But even if inflation did threaten to rise above the Fed’s 2.0% target for the PCE measure, all the signs are that officials would be in no rush to start raising interest rates again.