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Stocks fall for the 5th straight day – Wells Fargo fined $3.7 billion – EU approves cap on natural gas prices – Homebuilder sentiment drops for the 12th straight month – Meta could face $11.8 billion EU fine
Stock futures tumbled for the 5th consecutive day on Tuesday, with the Dow Jones industrial average dropping 5 points, or 0.02%, after being down over 200 points earlier. The S&P 500 slipped 0.17%, while NASDAQ futures slid 0.42%, CNBC reported. Stocks are on track to end both the month and the year in the red.
A hawkish move from the Bank of Japan sent the yen soaring as analysts expect others will follow in raising interest rates. U.S. Treasury yields rose, and US equity futures seesawed as a result, Yahoo reported.
The benchmark 10-year U.S. Treasury note was up +0.111 for a yield of 3.694% as of 9:55 AM EST on Tuesday.
Wells Fargo has agreed to pay a $3.7 billion settlement with the Consumer Financial Protection Bureau (CFPB) over customer abuses tied to bank accounts, mortgages, auto loans, and overdraft fees, the regulator announced on Tuesday. Shares of Wells Fargo fell 2.5% in premarket trading.
The bank was ordered to pay “more than $2 billion in redress to consumers,” and a $1.7 billion civil penalty, the CFPB said in a statement.
Wells Fargo is still operating under regulatory orders tied to the 2016 fake accounts scandal, which includes orders from the Fed that caps its asset growth, CNBC reported.
European Union energy ministers agreed to a “dynamic” cap on natural gas prices Monday following two months of intense negotiations. Many EU member states argued the measure is essential to bring down soaring energy costs for consumers, CNBC reported. The measure includes a market correction mechanism that will be automatically activated under two conditions: If front-month gas contracts exceed 180 euros ($191) per megawatt hour on the Dutch TTF for three working days in a row.
For the 12th straight month, homebuilder sentiment dropped, reaching the lowest level since 2012, according to the National Association of Home Builders.
Currently, roughly 62% of builders are using incentives to boost sales, such as providing mortgage rate buy-downs, paying points for buyers, and offering price reductions, CNBC reported. Sentiment is weakest in the West, where prices are highest, and strongest in the Northeast.
“The silver lining in this HMI report is that it is the smallest drop in the index in the past six months, indicating that we are possibly nearing the bottom of the cycle for builder sentiment,” NAHB’s chief economist said. “Mortgage rates are down from above 7% in recent weeks to about 6.3% today, and for the first time since April, builders registered an increase in future sales expectations.”
The monthly index is a gauge of participating builders who rate current single-family sales, sales prospects over the next six months, and the traffic of prospective buyers, according to Investopedia. The index sentiment among builders of U.S. single-family homes is a widely watched gauge of the U.S. housing sector.
The European Commission, the executive arm of the EU, said that it found Meta breached EU antitrust law by distorting competition in the markets for online classified ads. The issue comes from the company’s pairing of the Facebook Marketplace service, which lets users list items for sale. If Meta is found guilty of the charges, the company could face a fine as high as $11.8 billion, CNBC reported.
