U.S. stocks were mostly higher Wednesday as investors weighed a report on a sticking point to U.S.-China trade agreements against earlier congressional testimony from Federal Reserve Chair Jerome Powell.
According to the Wall Street Journal, the U.S. and China are sparring over agricultural purchase terms. President Donald Trump has previously said that China would buy $50 billion worth of farm goods annually, but China is reportedly hesitant to agree to a specific dollar amount of purchase commitments.
Meanwhile, a more than 7% surge in shares of Disney (DIS) led the Dow to a record closing high. Disney’s own stock hit an all-time high of $149.92 after announcing it added more than 10 million Disney+ sign-ups on the streaming service’s launch day on Tuesday.
Here’s where the markets settled Wednesday at the end of regular equity trading:
S&P 500 (^GSPC): +0.07%, or 2.2 points
Dow (^DJI): +0.33%, or 92.1 points
Nasdaq (^IXIC): -0.05%, or 3.99 points
10-year Treasury yield (^TNX): -2.3 bps to 1.886%
WTI crude oil prices: (CL=F): +0.6% to $57.17 per barrel
Gold (GC=F): +0.76% to $1,464.70 per ounce
Earlier, Powell appeared before Congress’s Joint Economic Committee Wednesday at 11 a.m. ET to discuss the outlook on the domestic economy. He is also set to appear before the House Budget Committee Thursday at 10 a.m. ET.
The testimony came just two weeks after Federal Reserve officials decided to cut benchmark interest rates for a third consecutive time this year but suggested further accommodation may be off the table for now. Investors broadly expected Powell would stick to the narrative reflected in the Fed’s latest monetary policy statement and in his subsequent press conference, suggesting that the committee will assess incoming economic data before deciding whether to adjust rates again.
In keeping with this theme, Powell told Congress that the “baseline outlook remains favorable” for the U.S. economy as it enters its eleventh year of expansion.
“We see the current stance of monetary policy as likely to remain appropriate as long as incoming information about the economy remains broadly consistent with our outlook of moderate economic growth, a strong labor market, and inflation near our symmetric 2 percent objective,” Powell said in remarks. During testimony, he added, “We do think monetary policy is in a good place.”
As of Wednesday afternoon, market participants priced in just a 3.7% probability of the Fed cutting its target interest rate after its December meeting, the last of 2019. Investors also reduced odds of another rate cut in 2020, pricing in a less than 50% probability of such an outcome, according to CME Group data.
“It now looks increasingly likely that the Fed will move to the side-lines for an extended period,” Andrew Hunter, senior U.S. economist for Capital Economics, wrote in a note after Powell’s prepared remarks were released.
Signs that the U.S. and China have been pacing toward a phase one trade deal have helped make the case for a less dovish Fed. Powell, in his press conference after the Fed’s October meeting, said global growth and trade developments “have weighed on the economy and pose ongoing risks,” but also noted that the committee saw the “risks to the outlook as perhaps having moved in a positive direction” between the Fed’s September and October meetings.
As it stands now, the U.S. and China have been on track to sign a partial trade deal, according to officials from both sides. However, exact terms of this interim deal remain in contention, and a written agreement is not expected to be signed until at least December.
Meanwhile, overseas, unrest was ongoing in Hong Kong Wednesday as protests continued to ravage the city, blocking subway lines and roads. The government demanded that schools be shut for students of all ages Thursday for the first time since protests began in June.
Hong Kong’s Hang Seng stock index closed lower by 1.8% Wednesday.
ECONOMY: Consumer prices rose slightly more than expected in October
Consumer prices posted a slightly greater than expected increase in October, the Bureau of Labor Statistics said Wednesday.
The headline consumer price index rose 0.4% between September and October, more than the 0.3% rise expected by consensus economists, according to Bloomberg data. Consumer prices had been unchanged between August and September.
Over last year, CPI increased 1.8%, also topping expectations for a 1.7% rise, which would have matched September’s pace.
Increases in energy prices contributed to most of October’s gain, with this index climbing 2.7% for the month after a 1.4% decline in September. Prices for used cars and trucks also swung to a monthly increase of 1.3% in October after falling 1.6% in September, and medical care equipment and services prices also both rose. Apparel prices slid 1.8% in October, marking a second consecutive month of declines.
The so-called core CPI – which excludes volatile food and energy prices and is viewed as a better gauge of underlying price trends – rose 0.2% in October, matching expectations. Over last year, core CPI rose 2.3%, or slightly slower than the 2.4% increase anticipated.
STOCKS: SmileDirectClub slides after first earnings report since IPO, Canada Goose tops expectations
SmileDirectClub (SDC) posted better-than-expected results for its fiscal third quarter after market close Tuesday, but shares of the newly public teledentistry company still fell as losses mounted. Third-quarter revenue rose to $180.2 million, ahead of the $165.6 million expected, based on Bloomberg-compiled data. Third-quarter adjusted EBITDA losses came in at $45.2 million, or narrower than the $48.9 million consensus. Shares of SmileDirectClub have more than halved since the company went public in September.
Other newly public companies fared better in their first earnings results since their IPOs. Late Tuesday, cloud data analytics company Datadog (DDOG) reported breakeven adjusted earnings per share, where a loss of about 13.8 cents a share had been expected. Third-quarter revenue jumped by 88% over last year to $95.9 million. Datadog, which also went public in September, said it expects to see a full-year loss per share of as much as 12 cents, much narrower than the 30 cents expected.
Premium winter-wear company Canada Goose (GOOS) reported estimates-topping third-quarter results before market open Wednesday, with both domestic and international sales jumping as temperatures dropped. In Asia, sales doubled to $48.9 million over last year, and U.S. sales grew 39% when removing currency impacts. Overall, revenue increased about 28% to $294 million during the quarter, and adjusted earnings surged to 57 cents a share, from 46 cents a share last year.
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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