Stock Market Today: August 22, 2019

The shares were mixed on Thursday after the yield curve between the US 2-year note and the 10-year bond reversed. This was done as investors analyzed the Fed's comments, suggesting that a rate cut may not be the next decision of the central bank.

Earlier in the session, equities had broadly increased, with investors taking into account corporate earnings, digesting European and national economic data, and waiting for remarks from the Federal Reserve chief on Friday.

Here are the main movements in the markets, starting at 12:40 pm AND:

• S & P 500 (^ GSPC): -0.19% or 5.59 points

• Dow (^ DJI): + 0.1%, or 27.25 points

• Nasdaq (^ IXIC): -0.54% or 42.77 points

• 10-year Treasury yield (^ TNX): +3.4 basis points to 1.611%

Market participants are waiting this week for Fed President Jerome Powell, who will deliver remarks at the central bank's annual Jackson Hole symposium on Friday. Investors are widely hopeful that Powell's rhetoric will lay the groundwork for further rate cuts over the next few months.

The comments of some Fed officials before Powell's much-awaited remarks, however, hindered hopes for easier monetary policy in the near term.

<p class = "canvas-atom web-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Thursday morning, the President of the Federal Reserve, Patrick Harker & nbsp;told CNBC& nbsp; that he supported the Fed's rate cut on July 31 "a bit reluctantly." "Data-reactid =" 25 "> Thursday morning, Federal Reserve Chairman Patrick Harker told CNBC that he was backing the Fed's rate cut on July 31" somewhat reluctantly ".

"I did not necessarily think the reduction was appropriate, but I followed it to return to neutrality," Harker said at the Jackson Hole conference. He added "we should stay here for a while" on the rates.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "From Thursday morning, the markets have reached a price of 91.2% probability of a 25 basis point easing after the September meeting, as well as a 58.5% probability that rates are still 25 basis points lower after the October meeting, & nbsp;according to the CME group.& nbsp; However, the markets expect a 10% probability that the benchmark borrowing costs will remain unchanged after the September meeting, with the probability rate of this result increasing during Thursday's session, at light of Harker's remarks. "data-reactid =" 27 "> As of Thursday morning, the markets were expecting a 25 basis point easing probability after the September meeting of 91.2%, as well as a 58 probability, 5% that rates are still 25 basis points lower after the October meeting, according to the CME group., Markets expect a 10% probability that benchmark borrowing costs will remain unchanged after the September meeting, with the probability rate of this result increasing during Thursday's session, in light of Harker's remarks.

The central bank has failed to agree on a lowering of the rate of July, the potential for disappointment remains high.

<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "In a & nbsp;Interview with Brian Cheung of Yahoo Finance& nbsp; At the Jackson Hole conference, Esther George, president of the Kansas Federal Reserve, "it's too early to judge how the real economy will be affected" by the uncertainty of trade, suggesting that a looser monetary policy might not necessarily be the Fed's next decision data-reactd = "29"> In an interview with Yahoo Finance's Brian Cheung at the Jackson Hole conference, Esther George, president of the Kansas Federal Reserve, said: "It is too early to judge how the real economy will be affected" by the uncertainty of trade, suggesting an easier monetary policy might not be the Fed's next action to help support the national economy in the face of geopolitical tensions.

<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "" The reduction of interest rates n & # 39 is not likely to solve this problem uncertainty ", George & nbsp;I said."Data-reactid =" 30 ">" Reducing interest rates will probably not solve this uncertainty, "George said.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "[Readmore:[Readmore:[Lirelasuite:[Readmore:George, Fed – It's "Too Soon" to Judge Rate Trends]"data-reactid =" 31 ">[Readmore:[Readmore:[Lirelasuite:[Readmore:George, Fed – It's "Too Soon" to Judge Rate Trends]

George was one of two dissidents in the Fed's July 31 decision to cut rates by a quarter of a point. To justify his dissent, George had stated that she should see the incoming data "indicate a weakening of the economy" before supporting an easier monetary policy.

During his interview with Yahoo Finance, George called "mixed" recent economic data from the United States.

The US manufacturing sector unexpectedly contracted in August

New data on the US economy show that activity in the manufacturing sector contracted in August and reached its lowest level in nearly 10 years.

<p class = "web-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Index of Purchasing Managers in the sector of manufacturing in the United States dropped to 49.9 in August, according to & nbsp;Reading ahead of IHS Markit. Unexpectedly, this figure has exceeded the neutral level of 50, indicating negative growth. The drop is mainly due to "a lower contribution from new orders, which offsets a stabilization in employment and a slightly faster growth in output," reported IHS Markit. "Data-reactid =" 36 "> The US Index of Purchasing Managers in the Manufacturing Sector (PMI) According to advanced figures from IHS Markit, the figures have dropped to 49.9 in August, which unexpectedly fell below the neutral level of 50, indicating negative growth.This drop is mainly due to "the lower contribution of new orders, which offset a stabilization in employment and slightly faster growth in production, "reported IHS Markit.

The services sector, however, continued to grow, with a PMI of 50.9 in August. This figure, however, was below expectations for a reading of 52.8, and at 53.0 for the previous month.

The 50.9 US composite PMI slid from 52.6 in July to its lowest level in three months.

<p class = "canvas-atom-text-canvas Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "" The most worrying aspect of the latest data is a slowdown in new business growth, which has reached its lowest point in a decade, due to a significant loss of momentum in the services sector, "said Tim Moore, deputy director of economic affairs at IHS Markit, a statement.declaration. "Interviewees said the slowdown in business spending is being held back by weaker growth expectations at home and internationally, which has prompted a tighter budget." Tim Moore, Associate Director in economics at IHS Markit, said in a statement: "Respondents answered a survey. at home and internationally encouraged the establishment of a tighter budget. "

But the new government data on the US labor market was more optimistic.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The Census Bureau reported that & nbsp;new unemployment claims& nbsp; fell more than expected last week and the remaining jobless claims also showed a downward trend. The publication has heightened persistent tensions in the national labor market, as companies continue to report difficulties in finding skilled workers to fill positions. The Census Bureau reported that new jobless claims had fallen more than expected last week, with the printing press reinforcing lingering tensions in the domestic labor market as companies continue to report difficulties in finding qualified workers to fill their positions.

The story continues

Economic growth in the euro zone remains weak in August

Abroad, however, economic growth has remained largely stubbornly low.

<p class = "web-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The manufacturing sector in Germany, the largest economy in the Eurozone, languished in August in contraction territory for an eighth consecutive month, according to & nbsp;IHS Markit Purchasing Purchasing Managers Index (PMI)& nbsp; published Thursday. In the services and manufacturing sectors of the country, output is expected to decline more in the next 12 months than for the first time in more than five years. Data-reactid = "48"> The manufacturing sector in Germany, the euro zone, The world's largest economy languished in August in August for the eighth consecutive month of contraction, according to the Purchasing Managers' Index. Advances (PMI) released by IHS Markit, released Thursday, in other service and manufacturing sectors – 12 months as rising for the first time in more than five years.

"Concerns about demand were one of the factors – in addition to increased uncertainty, the weakness of the auto industry and geopolitical tensions – the decline in business confidence in August," writes IHS Markit in a statement. communicated.

Data from the French economy were, however, more favorable in August.

More

<p class = "canvases-canvases-texts Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The SMIs of the French sectors of manufacturing and services have outperformed consensus, the last sector out of contraction and posting growth for the first time in two months The expansion of the service sector remains higher than that of manufacturing industries, "but reflecting the general trend observed in recent months in the region euro "& nbsp;IHS Markit said."data-reactid =" 62 "> The French manufacturing and services SMIs outperformed expectations, the latter sector emerging from a constraining territory and posting growth for the first time in two months. The expansion of the service sector has again surpassed that of the industry, however, "reflecting the general trend observed in the euro area in recent months," said IHS Markit.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Taken as a whole, the & nbsp;Composite PMI of the euro area economy& nbsp; reached its highest level in two months on Thursday and slightly outperformed expectations of consensus. Overall, the composite PMI of the eurozone economy reached Thursday its two-month high and slightly outperformed consensus expectations.

The composite output PMI reached 51.8, slightly above the neutral level of 50, separating contraction and expansion. The manufacturing PMI in the euro zone, however, remained below 50 for a seventh consecutive month.

"The dynamics of the eurozone economy did not change much in August, as strong growth in services continued to hold the economy above water despite the continuing decline in the manufacturing sector," said Andrew Harker, associate director of IHS Markit, in a statement. "While the overall expansion rate has accelerated, we still expect GDP to rise only 0.1% to 0.2%, based on third-quarter PMI data. until now ".

Update earnings

Meanwhile, corporate profits this week have been dominated by retailers. These reports have highlighted the continued strength of consumption, which contributes most to US economic growth, as well as the growing gap between retailers whose activities have adapted to new consumer demands and those who have fallen behind.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Nordstrom (JWN) surpassed the very low Q2 earnings expectations as the company's cost reduction and control efforts helped the department store avoid the underperformance reported by Macy's.M) for the same period. Nordstrom's quarterly sales, however, were below expectations and the company lowered its earnings guidance for the full year. "Data-reactid =" 68 "> Nordstrom (JWN) surpassed the very low expectations for the second quarter results, as the company's cost reduction and control efforts helped the department store evade the underperformance reported by his counterpart Macy's (M) for the same period (Nordstrom's quarterly sales were however below expectations) .Financial advice for the full year.

<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "L Trademarks (KG), the parent company of Victoria's Secret and Bath & amp; Body Works also exceeded expectations in terms of results for the second quarter, while sales were insufficient. Comparative sales of Victoria's Secret comparable stores, under close scrutiny, fell by 6% over the period, missing estimates for a decline of only 3.7%. Bath & amp; Body Works figures rose 8% over the period, exceeding expectations by about 2 percentage points. "Data-reactid =" 69 "> L Brands (LB), parent company of Victoria's Secret and Bath & Body Works, also surpassed its net profit Comparative same-store sales of Victoria & # 39; s Secret fell sharply by 6% over the period, missing estimates of a decline of just 3.7% .Bath & Body Works sales rose 8% over the period., exceeding expectations of about 2 percentage points.

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<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Emily McCormick is a journalist for Yahoo Finance. Follow her on Twitter: @emily_mcck"data-reactid =" 71 ">Emily McCormick is a journalist for Yahoo Finance. Follow her on Twitter: @emily_mcck

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