US open: Stocks muted as weak retail figures offset stimulus optimism
Wall Street stocks eked out some minor gains at the opening bell on Wednesday as market participants eyed apparent progress in stimulus talks and thumbed over some.
As of 1535 GMT, the Dow Jones Industrial Average was up 0.06% at 30,216.37, while the S&P 500 was up 0.18% at 3,701.35 and the Nasdaq Composite came out the gate 0.10% stronger at 12,608.23.
The Dow opened 17.06 points higher on Wednesday, just extending gains recorded in the previous session following a fresh proposal for another Covid-19 stimulus package and the continued rollout of coronavirus vaccines across the country.
That same proposal was in focus at the open on Wednesday after House Speaker Nancy Pelosi, Senate majority Leader Mitch McConnell, Senate minority Leader Chuck Schumer and House minority leader Kevin McCarthy met to strike a bipartisan aid deal, with Treasury Secretary Steven Mnuchin also joining in on the discussion.
"I'm optimistic that we're gonna be able to complete an understanding sometime soon," McConnell said, while Schumer added that the leaders were "making progress".
The first part of the proposal calls for $748.0bn in spending for programs backed by both sides of the aisle, including federal unemployment benefits and additional loans under the Paycheck Protection Program, while a second $160.0bn bill was set to cover the more controversial areas of the package - including business liability protections and financial assistance to both state and local governments.
A report from Politico later indicated that Congress was on the brink of a $900.0bn rescue deal that includes a new round of direct payments to consumers but stated it excluded a liability shield for businesses and state and local aid.
As far as the coronavirus itself was concerned, the US' seven-day average for new daily Covid-19 cases has hit least 215,400, while daily deaths have topped 2,300, according to data from Johns Hopkins University.
On the macro front, mortgage applications rose 1.1% across the US in the week ended 11 December, rebounding from two straight weeks of declines, according to the Mortgage Bankers Association. Applications to purchase a home increased 1.8%, up 26% year-on-year; while those for refinancing a home loan advanced 1.4%, up 105% year-on-year.
Elsewhere, retail sales volumes in the US fell by much more than expected last month as the holiday season got off to a very weak start. According to the Department of Commerce, in seasonally adjusted terms, retail sales volumes shrank at a month-on-month pace of 1.1% to hit $546.5bn. Economists had pencilled-in a reading of -0.2%
Turning to a flash reading of IHS Markit's manufacturing PMI for December, business activity appeared to have slowed in the first half of December, with renewed restrictions to slow a resurgent number of new Covid-19 cases hurting the services sector and dragging the flash Composite PMI Output Index, which tracks the manufacturing and services sectors, to a reading of 55.7 from 58.6 in November.
Still on data, business inventories rose 0.7% in October after increasing 0.8% in September, according to the Commerce Department, suggesting inventory investment could help to keep the economy on a moderate growth path in the fourth quarter.
Lastly, the NAHB's December housing market index revealed that homebuilder confidence in the single-family housing market pulled back in December, with sentiment dropping four points to 86 in December. However, that was still the second-highest reading in the history of the index.
Still to come, economic projections from the FOMC and an interest rate decision from the Fed will come at 1900 GMT, with a press conference following at 1930 GMT.
In the corporate space, home construction group Lennar will update on trading after the close.