Stock market today: Dow, S&P 500, Nasdaq waver amid earnings rush, Bessent confirmation hearing

December retail sales data showed the US economy likely ended 2024 growing at a solid pace amid questions over how quickly the Federal Reserve will cut interest rates.

The control group in Thursday’s release, which excludes several volatile categories and factors into the gross domestic product (GDP) reading for the quarter, increased by 0.7%, above economists’ estimates for 0.4% sales growth.

“This was actually a strong report that boosts our fourth-quarter GDP growth estimate to 2.9% [from 2.7%],” Capital Economics chief North America economist Paul Ashworth wrote in a note to clients on Thursday.

After the release, the Atlanta FedGDP Now Tool, which takes economic data released throughout the quarter to create GDP projection, now forecasts the US economy grew at an annualized pace of 3% in the fourth quarter. The projection moved up from 2.7% after the retail sales release.

The nominee for Treasury Secretary, Scott Bessent, said he would support tougher sanctions against Moscow in order to end the Ukraine war, if President-elect Donald Trump were to request them.

“If I’m confirmed, and if President Trump requests, and as part of his strategy to end the Ukraine war…I will be 100% on board for taking sanctions up, especially on Russian oil majors, to levels that will bring the Russian Federation to the table,” said Bessent during a Senate confirmation hearing on Capitol Hill.

The US Treasury recently announced broad-based sanctions against Russian energy in order to cut off Moscow’s revenue amid the ongoing war in Ukraine. Bessent questioned the timing of those wider measures recently announced, which have sent oil prices higher just before Trump takes office.

However he expressed support for using tough sanctions as part of a negotiation tactic to bring the Ukraine-Russia conflict to and end.

During the hearing, Bessent also stated his support for sanctions against Iran.

Yahoo Finance’s David Hollerith reports:

Fourth-quarter 2024 profits at Bank of America (BAC) and Morgan Stanley (MS) more than doubled, cementing a Wall Street revival that has dealmakers optimistic about the coming Trump era in 2025.

Strong investment banking and trading results also helped push profits higher at other big banks in the fourth quarter, including JPMorgan Chase (JPM), Goldman Sachs (GS), Citigroup (C), and Wells Fargo (WFC).

The six major US banks that have reported earnings so far this week showed a combined profit of more $36 billion in the fourth quarter and $145.7 billion for all of 2024.

The fourth quarter mark was more than double their collective profit in the fourth quarter of 2023, and the annual haul was 19% higher.

Read more here.

Yahoo Finance’s Claire Boston reports:

Mortgage rates rose this week to the highest level since May 2024 during a volatile period for the bonds that closely track them.

The average 30-year mortgage rate jumped to 7.04% through Wednesday, up from 6.93% a week earlier, after strong employment data pushed yields higher on the Treasury bonds that are most closely linked to mortgage rates. Average 15-year mortgage rates also rose to 6.27%, from 6.14%, according to Freddie Mac.

Read more here.

Share of Apple and Tesla led the Nasdaq (^IXIC) lower on Thursday. The tech-heavy index dropped about 0.3%.

Apple stock declined more than 3%, on track for its lowest close since November. The iPhone maker has been under pressure over concerns of slowing sales in China.

Share of EV maker Tesla (TSLA) shares also dropped on Thursday, falling more than 3.5%. The company is offering new discounts on Cybertrucks, an indication that the electric vehicle pickup may be suffering from a slump.

The nominee for Treasury Secretary Scott Bessent called out US federal spending in reaction to Senator Grassley’s comments about a fiscal imbalance during Thursday’s confirmation hearing.

“Yes, we do not have a revenue problem in the United States of America, we have a spending problem,” said Bessent.

“This spending is out of control. We are spending about 24% or 25% of GDP… we have never seen this before when it is not a recession or not a war,” said Bessent.

He added, “I’m concerned, because several times, the Treasury of the United States has been called upon to save the nation.” Bessent cited major borrowing amid events like World War II, the Great Depression, and the recent pandemic.

Scott Bessent, the nominee for Treasury Secretary highlighted an opportunity for a new ‘Golden Age’ for the US during opening remarks at his confirmation hearing.

“Today, I believe that President Trump has a generational opportunity to unleash a new economic Golden Age that will create more jobs, wealth, and prosperity for all Americans,” Bessent told lawmakers on Thursday morning.

The nominee highlighted his life’s work in the private sector has given him a understanding of the economy and markets.

“Having never served in government, I intend if confirmed, to be in close contact with each of you and your offices, and seek your council,” said Bessent.

He also highlighted the need for the government to ensure the US Dollar remains the world’s reserve currency.

Lawmakers were making opening remarks on Thursday morning at the confirmation hearing for President-elect Donald Trump’s nominee for Treasury secretary, Scott Bessent.

The hearing is likely to last about two and a half hours.

Likely topics Bessent will face questions on include policies surrounding tariffs and Republican tax initiatives and spending plans for 2025.

President-elect Donald Trump’s nominee for Secretary of the US Department of the Treasury, Scott Bessent, will face questions from lawmakers on Capitol Hill today starting at 10:30 a.m ET.

Yahoo Finance’s Ben Werschkul reports on two issues to watch for during the hearing: One is around a swirl of seemingly competing tariff plans before President-elect Donald Trump, some of which Bessent himself is reportedly pushing.

A second is whether Republicans will be able to ignore debt concerns and go big with their 2025 tax and spending plans.

Read more here.

Builders are starting the year with more optimism than in the end of 2024, despite elevated 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 higher than economists’ estimates of 45, per Bloomberg data.

Still, a reading under 50 indicates more builders view conditions as poor rather than good.

The dilemma of high housing costs persists, with mortgage rates hovering closer to 7% over the past four consecutive weeks, according to Freddie Mac. Markets expect the Fed will likely leave rates unchanged this month, especially after fresh inflation data released Wednesday showed some signs of easing. The Fed doesn’t set mortgage rates but its actions influence the direction of yields, which in turn affect borrowing costs.

The NAHB survey showed builders continue to offer concessions in January. The survey found that 60% of builders used some sort of sales incentive to close the deal, while 30% of builders cut home prices to bolster sales in January. The average price reduction was 5%, matching December’s price cut.

US 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) increased about 0.3%. The Dow Jones Industrial Average (^DJI) hovered near the flatline.

Investors were watching for a continuation of Thursday’s performance when stocks ripped higher on the heels of better than expected inflation data and strong quarterly bank earnings.

Traders have been assessing how many rate cuts the Federal Reserve will implement this year following a better than expected jobs report last Friday but a cooling inflation print on Wednesday.

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

Yahoo Finance’s Josh Schafer reports:

Retail sales grew at a slower pace than Wall Street had expected in December as investors keep a close eye on the pace of economic growth amid questions over how quickly the Federal Reserve will cut interest rates.

Retail sales rose 0.4% in December. Economists had expected a 0.6% rise in spending, according to Bloomberg data. Meanwhile, retail sales in November were revised up to 0.8% from a prior reading that showed a 0.7% increase in the month, according to Census Bureau data.

Read more here.

Good chart by the Vanda Research team looking at Mag 7 flows from the retail trading community.

You can see activity having slowed down in January with names like Nvidia under pressure.

Dare I say it’s refreshing to see traders nibble at the other 493 stocks in the S&P 500!

Target (TGT) dropped its holiday sales results this morning, and the stock is up in the pre-market.

Not sure why Target didn’t blow me away!

Sales barely grew and the company reiterated its EPS outlook — an outlook that at the top end is $0.20 below current sell-side consensus.

Bottom line: This is yet another quarter from Target that sheds light on its continued market share loss to Walmart (WMT). Here’s what Walmart CEO Doug McMillon told me when accepting our 2024 Company of the Year award.

PS: I like Walmart’s new blue logo color that ties back to founder Sam Walton’s iconic trucker hat.