U.S. Economy Grows Slower Than Expected, Jobless Claims Fall, and Markets React
Today's economic data showed the U.S. economy grew slower than expected in the fourth quarter of 2022, coming in at 2.7%, versus estimates of 2.9%, and 3.2% in the third quarter. The revised figure from the Commerce Department also revealed that all three components of GDP, durable goods, non-durable goods, and services, were revised up.
In the labor market, U.S. initial jobless claims fell to 192,000 during the week ended Feb. 18 from an upwardly revised 195,000 level in the previous week, compared with expectations for an increase to 200,000 in a survey of analysts compiled by Bloomberg. The report stated that initial jobless claims decreased by 3,000 to 192,000, which is lower than the revised level of 195,000 from the week prior.
Meanwhile, weekly continuing unemployment claims fell -37,000 to 1.654 million, showing a stronger labor market than expectations of an increase to 1.700 million.
Shares of Nvidia (NVDA) soared after the software company posted better-than-expected results in the previous quarter while boosting current quarter guidance, and said chip demand for artificial intelligence (AI) applications such as ChatGPT is surging. However, shares of eBay Inc. (NASDAQ:EBAY) fell 7.6% after the online auction site warned of slower demand because of shifts in consumer spending. Additionally, Domino’s Pizza (DPZ) dropped more than -8% in pre-market trading after reporting Q4 revenue of $1.39 billion, weaker than the consensus of $1.43 billion.
Investors received a readout of minutes from the Federal Reserve's Jan. 31- Feb. 1 meeting that indicated officials were intent on proceeding with “ongoing increases” in interest rates to quell inflation. It is now anticipated that the federal funds rate will reach its highest at 5.5%. The stock price of Lucid Group (LCID) dropped by almost 13% after its fourth-quarter financial results failed to meet expectations, and a decrease in preorders for its Air sedan showed a decrease in demand for its cars.
On the flip side, Etsy (ETSY) rallied more than +5% in pre-market trading after reporting Q4 revenue of $807.2 million, stronger than the consensus of $753.7 million.
0. “Stock Market News Today: Stock Market Rally Dissolves, Indices Turn Red” TipRanks, 23 Feb. 2023, https://www.tipranks.com/news/stock-market-news-today-u-s-futures-inch-up-after-a-volatile-trading-day
1. “Markets Today: Nvidia's Bullish Revenue Outlook Lifts Stock Index Futures” Barchart, 23 Feb. 2023, https://www.barchart.com/story/news/14481266/markets-today-nvidias-bullish-revenue-outlook-lifts-stock-index-futures
2. “Nvidia Shares Soar on Earnings Beat, Chip Demand for AI Applications” Investopedia, 23 Feb. 2023, https://www.investopedia.com/nvidia-shares-soar-on-earnings-beat-chip-demand-for-ai-applications-7112912
3. “U.S. stocks wobble as rate fears outweigh strong earnings By Investing.com” Investing.com, 23 Feb. 2023, https://www.investing.com/news/stock-market-news/us-stocks-are-rising-after-nvidias-upbeat-outlook-3012553
4. “Nasdaq, S&P, Dow erase gains to trade lower; NVIDIA soars after results” msnNOW, 23 Feb. 2023, https://www.msn.com/en-us/money/markets/nasdaq-sandp-dow-erase-gains-to-trade-lower-nvidia-soars-after-results/ar-AA17QZbl
5. “Stock market news today: February 23, 2023” Yahoo News, 23 Feb. 2023, https://news.yahoo.com/stock-market-news-today-february-23-2023-122852056.html
Leave a Comment
You must be logged in to post a comment.