Market Recap: Confusion Reigns as Economic Data Causes Market Turmoil

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Alex Partida

Dec 23rd 2022  .  3 min read

Confusion reigns as economic data causes market turmoil

The release of the Personal Consumption Expenditures (PCE) Price Index data caused some confusion in the market this morning. The numbers, which came in at 4.7% (year-over-year), were slightly higher than expected but lower than the previous month. This mixed reaction initially sent the market to its pre-market lows, but it quickly recovered after the data was fully analyzed. The Fed uses the PCE price index as an indicator to make decisions on future rate hikes, so the market will continue to pay close attention to this data.

Tech giants weigh down market

Tech stocks bring the market down in early trading. The stock market started off on a negative note, with tech giants like Tesla Motor Company (TSLA), Netflix, Inc. (NFLX), and  Apple, Inc. (AAPL) leading the decline. Tesla saw a steep drop at the opening bell, and other tech names followed suit. Concerns about Twitter’s influence on Tesla CEO Elon Musk’s responsibilities may have contributed to the sell-off. The overall market struggled to trend in a single direction as tech stocks weighed down the indices.

Umich sends market higher 

Shortly after the cash market opened, the University of Michigan (Umich) Consumer Sentiment Index reported at 10 a.m. Eastern. The median forecast for this number was to be seen at 59.1, but actual data came in higher at 59.

The University of Michigan Consumer Sentiment Index showed that, despite not being overly optimistic, consumers are feeling more positive about the economy and their personal finances. This survey is based on 500 phone interviews, and the improvement from the previous month’s reading of 59.1 is a good sign that people are feeling more inclined to spend money, which can help boost the economy. As we head into the holiday season, it’s heartening to see a bit of optimism in the air.

The stock market saw a boost in optimism and positivity as Christmas approaches, with indices pushing higher for the remainder of the trading session. A strong trend emerged, with the market making higher lows until the closing bell. Despite pre-market and opening bell selling, the market was able to halt the downward momentum and end the day on a more positive note. This upward trend was not significant enough to make significant gains, but it did help to prevent further losses heading into the weekend.

The psychological level of 3,900 on the S&P 500 has been a key factor in the market’s recent movements. If the market is able to hold above this level, it could potentially push higher into the new year. However, if the market breaks below this level with strength, it could signal a decline toward the lower target levels of 3,850 and 3,800. This level will continue to be watched closely in the coming week as investors and traders look for clues about the market’s direction.

Three-day weekend and short week ahead

The New York Stock Exchange is closed on Monday, December 26th, in observance of Christmas. This means that there will be a long weekend and a short week ahead. The economic calendar is relatively light in the short week leading into the new year. 

On Thursday, initial and continuing jobless claim data will be announced at 8:30 a.m. Eastern. The Chicago Purchasing Managers Index (PMI) will be released on Friday at 9:45 a.m. Eastern. 

The market closes green into the weekend

The Nasdaq and the S&P 500 were positive to close the session. The S&P 500 futures closed up 0.53%, gaining 21 points, while the Nasdaq futures closed up 0.15%, adding 17 points. The Dow Jones futures followed, closing up 0.45%, rising 150 points.