On December 12, 2023, major stock indexes in the U.S. faced declines, with the S&P 500 down 0.61%, the Dow Jones down 0.12%, and the Nasdaq 100 down 1.12%. December E-mini S&P futures fell by 0.66%, and December E-mini Nasdaq futures dropped by 1.15%. Key contributors to the downturn included weakness in AI infrastructure stocks and homebuilding sector stocks, notably Lennar, which fell 5% after disappointing earnings reports.
In economic data, U.S. mortgage applications decreased by 3.8% in the week ended December 12, with the average 30-year fixed mortgage rate rising to 6.38%. Upcoming reports are anticipated to reveal a decrease in initial unemployment claims by 11,000 to 225,000 and a 1.2% increase in existing home sales in November. The markets are pricing in a 24% chance of a Federal Reserve rate cut at their meeting on January 27-28.
Internationally, the Euro Stoxx 50 index declined by 0.24%, while China’s Shanghai Composite rose by 1.19%. European government bond yields were mixed, with the 10-year German bund yield up to 2.851%. Eurozone November CPI was revised down to 2.1% year-over-year, and the German IFO business conditions index fell to a seven-month low.
