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Stocks dip ahead of remarks by Fed’s Powell – Gas and other things rising in 2023 – Consumer borrowing increased by $28 billion in November – US banks preparing for recession
Stocks moved lower on Tuesday as Wall Street investors awaited a fairly rare public speaking appearance by Federal Reserve Chairman Jerome Powell. Powell is set to speak at a panel discussion on central bank independence hosted by Sweden’s central bank, CNN Business reported.
S&P 500 futures declined 0.5%, while Dow Jones Industrial Average futures fell 150 points or 0.4%, and contracts on the technology-heavy NASDAQ Composite slid by 0.7%, Yahoo Finance reported.
The benchmark US 10-Year Treasury Note was up +0.078 for an increased yield of 3.595% as of 8:43 AM EST.
With a little over the first week of the new year getting underway, a number of key consumer items are already seeing prices increase and are expected to continue through 2023.
Gasoline
Gasoline prices are on the rise, nearly 10 cents a gallon higher than a week ago, and could reach $4 per gallon by Memorial weekend, some experts believe, WRAL reported.
China reopening its borders has increased demand and pushed oil prices up, while refineries are still dealing with the effects of an arctic blast in December. The national average on Tuesday, January 10, 2023, was $3.270 per gallon, according to AAA. Hawaii had the highest price at $5.00, while California was second at $4.42.
Eggs
Egg prices are spiking around the country, with the national average price of $3.30, the USDA said last week. In the Houston area and $5.27 for 12 large eggs at Walmart, click2houston reported. In California, the average price for a dozen eggs reached $7.37 last week compared to $2.35 a year ago.
According to USDA data provided by the American Egg Board, one factor is the outbreak of bird flu last year that killed roughly 60 million birds. The situation is being worsened by higher feed and energy costs, as well as higher demand at the supermarket as some Americans have switched to eggs as their main protein source amid higher meat prices, CBS reports.
Mortgages
The average rate for a 30-year fixed-rate mortgage rose to 6.48% for the week ending Jan. 5, according to Freddie Mac’s Primary Mortgage Market Survey. It marks an increase from the previous week, which averaged 6.42%, up from 3.22% last year, FOXBusiness reports.
The amount of money borrowed by US consumers increased by nearly $28 billion in November, according to data released by the Federal Reserve. Although it was below the $29.12 billion jump in October, it extends a historic amount of reliance on debt during the year with soaring inflation, CNN reported.
Four US banking giants – J.P. Morgan Chase, Bank of America, Citigroup, and Wells Fargo will report earnings on Friday and are forecast to report lower fourth-quarter profits, as US lenders move to stockpile rainy day funds in preparation for an economic slowdown amid an anticipated recession, Reuters reported.
These four banking giants, along with Morgan Stanley and Goldman Sachs, make up the six largest US lenders, who are expected to amass a combined $5.7 billion in reserves to prepare for soured loans, according to average projections by Refinitiv. The amount is more than double the $2.37 billion set aside a year earlier.
