Major indices are split with the S&P 500 and Nasdaq in the green.  In the red are The Russell 2000 and Dow Jones. The latter is being led lower primarily by UnitedHealth Group (UNH) following yesterday’s news that the administration will keep Medicare reimbursement rates flat next year.

The Magnificent Seven are mostly moving higher heading into several of their earnings, and contributing to the Nasdaq and S&P 500’s outperformance.

Five sectors are in the green this afternoon. The AI trade is catching a bid, with Technology (XLK) and Utilities (XLU) in the lead. On the other hand, Health Care (XLV) is lagging, followed by Financials (XLF).   

The Ten-Year Treasury Yield (TNX) has moved off its recent highs, bouncing off support around 4.2%.

The Dollar Index (DXY) is making a notable move lower, hitting its lowest levels since March 2022.

Economic Data

The Richmond manufacturing Index edged up to -6 in January from -7 in December and above expectations of -8.

Notable Points:

• Shipments improved to -5 from -11
• The drip in new orders decelerated to -6 from -8
• Backlog of new orders depleted fast at -13 from -7
• Prices paid for inputs accelerated to 7.06 from 6.53
• Expectations for new orders improved to 36 from 27
• Expectations for shipments rose to 34 from 28

The Dallas Fed Services Index improved to 2.7 in January from -5 in December. Input costs slowed to 21.1 from 27.1, while expectations of future conditions improved to 5.6 from -2.7.

Conference Board Consumer Confidence in January fell to 84.5 from 94.2 and missed estimates of 90.9. The Present Situation Index dropped 9.9 points to 113.7, while the expectations index fell 9.5 points to 65.1.

As previously noted, there is a big split in confidence between political parties, as well as, generations, with younger generations showing the most optimism.

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