Dow, S&P 500, Nasdaq waver amid earnings rush, positive confirmation hearing

As David Hollerith of Yahoo Finance reports:

Fourth-quarter 2024 profits more than doubled at Bank of America ( BAC ) and Morgan Stanley ( MS ) , bolstering Wall Street’s optimism about the coming 2025 Trump era.

Strong investment banking and trading results helped boost profits in the fourth quarter, including JPMorgan Chase ( JPM ), Goldman Sachs ( GS ), Citigroup ( C ) and Wells Fargo ( WFC ).

The six major U.S. banks that reported earnings this week reported profits of more than $36 billion in the fourth quarter and a total of $145.7 billion for 2024.

The fourth-quarter mark was more than double their fourth-quarter 2023 gross profit, and annualized growth was 19% higher.

Read more here.

Yahoo Finance’s Claire Boston reports:

Mortgage rates rose this week to their highest level since May 2024 amid a volatile period for bonds.

The average 30-year mortgage rate rose to 7.04% from 6.93% a week earlier after strong employment data pushed up products more closely tied to mortgage rates than Treasury bonds. The average 15-year mortgage rate also rose to 6.27% from 6.14% at Freddie Mac.

Read more here.

Shares of Apple and Tesla led the Nasdaq (^IXIC) lower on Thursday. The technology-heavy index fell to 0.3%.

Apple stock is down more than 3% on its way to its lowest since November. The iPhone maker has come under pressure from the seriousness of the issue. Declining sales in China.

Shares of EV maker Tesla ( TSLA ) also fell on Thursday, falling more than 3.5%. The company is offering new discounts on the Cybertruck, an indication that the electric vehicle may suffer from the slowdown.

During Thursday’s confirmation hearing, Treasury Secretary Scott Bessant called Senator Grassley on US federal spending to comment on the fiscal imbalance.

“Yes, in the United States of America we don’t have a revenue problem, we have a spending problem,” he said.

“This spending is out of control. We’re spending 24% or 25% of GDP…we’ve never seen this before unless it’s a recession or a war,” Besant said.

He added, “I am concerned because many times the United States Treasury has been called upon to bail out the country.” Bessant cites prime lending among events such as World War II, the Great Depression, and the recent pandemic.

Treasury Secretary nominee Scott Bessant highlighted the possibility of a new ‘gilded age’ for America during his opening remarks at his confirmation hearing.

“Today, I believe President Trump has a generational opportunity to usher in a new economic golden age, one that will create more jobs, wealth and prosperity for all Americans.”

The appointee stated that his life’s work in the private sector enabled him to understand the economy and the market.

“Having never served in government, I intend to meet closely with each of you and your offices and seek council if confirmed,” Besant said.

He also pointed out that the government needs the US dollar to remain the world’s reserve currency.

Lawmakers were making opening statements Thursday morning at the confirmation hearing for President Donald Trump’s Treasury Secretary nominee Scott Bessant.

The hearing may last for two and a half hours.

Bessent will likely face questions about policies around tariffs and Republican tax initiatives and 2025 spending plans.

President-elect Donald Trump’s nominee for Treasury Secretary Scott Bessant will face questions from lawmakers on Capitol Hill starting at 10:30 a.m. today.

Yahoo Finance’s Ben Werschkull reports on two issues to watch during the hearing: one surrounding President-elect Donald Trump’s seemingly competitive tariff plans, some of which Bessant himself is said to be pushing.

The second is whether Republicans can ignore debt concerns and go big in their 2025 tax and spending plan.

Read more here.

Builders are starting to look more optimistic than late 2024, despite higher mortgage rates.

The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index rose to 47 in January, up one point from December and above economists’ estimate of 45, according to Bloomberg data.

Still, the under-50 reading shows that many builders view conditions as poor rather than good.

According to Freddie Mac, the dilemma of high housing costs continues, with mortgage rates up nearly 7% for the past four weeks in a row. Markets expect the Fed to leave rates unchanged this month, especially after the new inflation data released on Wednesday showed some signs of easing. The Fed does not set mortgage rates, but its actions influence the direction of yields, which in turn affect borrowing costs.

The NAHB survey showed that builders continued to offer offers in January. The survey found that 60% of builders use some form of sales incentive to close the deal, while 30% of builders reduce home prices to boost sales in January. The average price drop was 5%, matching the December price drop.

U.S. stocks were mixed on Thursday following the S&P 500’s (^GSPC) best daily performance since November and strong quarterly bank earnings.

The broad-based index rose more than 0.1%, while the Nasdaq Composite (^IXIC) rose 0.3%. The Dow Jones Industrial Average (^DJI) hovered near the flat line.

Investors were looking for a continuation of Thursday’s performance as stocks beat expectations for inflation and strong quarterly bank earnings.

Following Friday’s better-than-expected jobs report but Wednesday’s inflation publication, traders are assessing how much rate cuts the Federal Reserve will implement this year.

“They now forecast two 25bp cuts in June and December this year (previously three cuts in March, June and September), followed by another cut in June 2026,” Goldman Sachs analysts said in a recent note.

As Yahoo Finance’s Josh Shafer reports:

Retail sales rose more than Wall Street expected in December amid questions about how quickly the Federal Reserve will cut interest rates.

Retail sales rose 0.4 percent in December. Economists had expected a 0.6% increase in spending, according to Bloomberg data. Meanwhile, retail sales in November improved to 0.8% from the preliminary reading, which showed an increase of 0.7% in the month. Census Bureau information.

Read more here.

A nice chart by Wanda Research Group Mag 7 looking at the flows from the retail community.

You can see activity slow down in January under pressure from names like Nvidia.

I’d say it’s refreshing to see traders roll over the other 493 stocks in the S&P 500!

Target ( TGT ) is off the results of a holiday sell-off this morning, and the stock is in pre-market territory.

Not sure why it didn’t target me!

Sales were barely up, and the company reiterated its EPS outlook — $0.20 below current sell-side consensus at the top end.

Bottom Line: This is another quarter against Target, which sheds light on the continued market share losses at Walmart ( WMT ). Here’s what Walmart CEO Doug McMillon had to say to me when he accepted our 2024 Company of the Year award.

PS: I love Walmart. New blue logo A color that ties in with founder Sam Walton’s iconic trucker hat.