Stocks ended higher on Friday, with the S&P 500 and Nasdaq closing out the session at record levels.
The S&P 500 and Nasdaq each rose about 0.5 %, while the Dow ended simply a tick above the flatline. U.S. stocks shook off earlier declines after monitoring a drop in overseas equities, after new data showed that UK gross domestic product (GDP) slumped by a record 9.9 % in 2020 as a virus-induced recession swept the nation.
Shares of Dow component Disney (DIS) reversed earlier profits to fall greater than 1 % and pull back out of a record high, after the company posted a surprise quarterly profit and grew Disney+ streaming prospects more than expected. Newly public organization Bumble (BMBL), which began trading on the Nasdaq on Thursday, rose another seven % after jumping 63 % in its public debut.
Over the older couple weeks, investors have absorbed a bevy of stronger than expected earnings results, with corporate earnings rebounding faster than expected despite the ongoing pandemic. With at least eighty % of businesses now having reported fourth-quarter outcomes, S&P 500 earnings per share (EPS) have topped estimates by 17 % in aggregate, and bounced back above pre COVID amounts, according to an analysis by Credit Suisse analyst Jonathan Golub.
“Prompt and generous government action mitigated the [virus-related] injury, leading to outsized economic and earnings surprises,” Golub said. “The earnings recovery has been substantially more powerful than we might have thought possible when the pandemic for starters took hold.”
Stocks have continued to establish fresh record highs against this backdrop, and as monetary and fiscal policy support stay robust. But as investors come to be comfortable with firming corporate performance, companies might have to top greater expectations to be rewarded. This may in turn put some pressure on the broader market in the near-term, and also warrant more astute assessments of individual stocks, according to some strategists.
“It is no secret that S&P 500 performance continues to be very formidable over the past few calendar years, driven largely through valuation development. Nevertheless, with the index P/E [price-to-earnings ratio] recently eclipsing its prior dot com extremely high, we think that valuation multiples will start to compress in the coming months,” BMO Capital Markets strategist Brian Belski wrote in a note Thursday. “According to the work of ours, strong EPS growth is going to be required for the following leg greater. Thankfully, that is precisely what existing expectations are forecasting. However, we additionally discovered that these types of’ EPS-driven’ periods tend to be more complicated from an investment strategy standpoint.”
“We assume that the’ easy money days’ are over for the time being and investors will need to tighten up their aim by evaluating the merits of individual stocks, rather than chasing the momentum laden strategies who have just recently dominated the expense landscape,” he added.
4:00 p.m. ET: Stocks end higher, S&P 500 and Nasdaq reach record closing highs
Here’s where the key stock indexes ended the session:
S&P 500 (GSPC): +18.55 points (+0.47 %) to 3,934.93
Dow (DJI): +27.44 points (+0.09 %) to 31,458.14
Nasdaq (IXIC): +69.70 points (+0.5 %) to 14,095.47
2:58 p.m. ET:’ Climate change’ is the most-cited Biden policy on company earnings calls: FactSet
Fourth-quarter earnings season represents the very first with President Joe Biden in the White House, bringing an innovative political backdrop for corporations to contemplate.
Biden’s policies around environmental protections as well as climate change have been the most cited political issues brought up on corporate earnings calls so far, according to an analysis from FactSet’s John Butters.
“In terms of government policies discussed in conjunction with the Biden administration, climate change and energy policy (28), tax policy (20 COVID-19 and) policy (nineteen) have been cited or maybe talked about by the highest number of businesses with this point on time in 2021,” Butters wrote. “Of these twenty eight companies, 17 expressed support (or even a willingness to work with) the Biden administration on policies to reduce carbon as well as greenhouse gas emissions. These seventeen corporations possibly discussed initiatives to minimize the own carbon of theirs as well as greenhouse gas emissions or perhaps services or products they give to assist clientele and customers lower the carbon of theirs and greenhouse gas emissions.”
“However, 4 businesses also expressed a number of concerns about the executive order starting a moratorium on new oil and gas leases on federal lands (plus offshore),” he added.
The list of twenty eight companies discussing climate change and energy policy encompassed businesses from an extensive array of industries, like JPMorgan Chase, United Airlines Holdings and 3M, alongside traditional oil majors like Chevron.
11:36 a.m. ET: Stocks combined, S&P 500 and Nasdaq turn positive
Here is where markets were trading Friday intraday:
S&P 500 (GSPC): +7.87 points (+0.2 %) to 3,924.25
Dow (DJI): 8.77 points (-0.03 %) to 31,421.93
Nasdaq (IXIC): +28.15 points (+0.21 %) to 14,053.77
Crude (CL=F): +$0.65 (+1.12 %) to $58.89 a barrel
Gold (GC=F): +$0.20 (+0.01 %) to $1,827.00 per ounce
10-year Treasury (TNX): +2.7 bps to deliver 1.185%
10:15 a.m. ET: Consumer sentiment unexpectedly plunges to a six month lower in February: U. Michigan
U.S. consumer sentiment slid to the lowest level after August in February, according to the University of Michigan’s preliminary once a month survey, as Americans’ assessments of the path ahead for the virus-stricken economy suddenly grew a lot more grim.
The headline consumer sentiment index dipped to 76.2 from 79.0 in January, sharply lacking expectations for a surge to 80.9, as reported by Bloomberg consensus data.
The complete loss of February was “concentrated in the Expectation Index and involving households with incomes under $75,000. Households with incomes in the bottom third reported significant setbacks in the present finances of theirs, with fewer of the households mentioning recent income gains than anytime after 2014,” Richard Curtin chief economist for the university’s Surveys of Consumers, said in a statement.
“Presumably a brand new round of stimulus payments will lessen fiscal hardships with those with the lowest incomes. A lot more surprising was the finding that consumers, despite the likely passage of a massive stimulus bill, viewed prospects for the national economy less favorably in early February compared to last month,” he added.
9:30 a.m. ET: Stocks open lower, but speed toward posting weekly gains
Here is where markets were trading simply after the opening bell:
S&P 500 (GSPC): -8.31 points (-0.21 %) to 3,908.07
Dow (DJI): -19.64 (-0.06 %) to 31,411.06
Nasdaq (IXIC): -53.51 (+0.41 %) to 13,970.45
Crude (CL=F): -1dolar1 0.23 (-0.39 %) to $58.01 a barrel
Gold (GC=F): 1dolar1 10.70 (-0.59 %) to $1,816.10 per ounce
10-year Treasury (TNX): +3.2 bps to yield 1.19%
9:05 a.m. ET: Equity funds see highest weekly inflows actually as investors pile into tech stocks: Bank of America
Stock cash just saw their largest ever week of inflows for the period ended February ten, with inflows totaling a record $58.1 billion, based on Bank of America. Investors pulled a total of $800 million out of gold and $10.6 billion out of profit during the week, the firm added.
Tech stocks in turn saw the own record week of theirs of inflows at $5.4 billion. U.S. large cap stocks saw their second-largest week of inflows ever at $25.1 billion, and U.S. tiny cap inflows saw their third-largest week at $5.6 billion.
Bank of America warned that frothiness is rising in markets, however, as investors keep piling into stocks amid low interest rates, as well as hopes of a good recovery for corporate earnings and the economy. The firm’s proprietary “Bull as well as Bear Indicator” monitoring market sentiment rose to 7.7 from 7.5, nearing an 8.0 “sell” signal.
7:14 a.m. ET Friday: Stock futures point to a lower open
Here were the primary moves in markets, as of 7:16 a.m. ET Friday:
S&P 500 futures (ES=F): 3,904.00, down 8.00 points or even 0.2%
Dow futures (YM=F): 31,305.00, down fifty four points or perhaps 0.17%
Nasdaq futures (NQ=F): 13,711.25, down 17.75 points or perhaps 0.13%
Crude (CL=F): -1dolar1 0.43 (-0.74 %) to $57.81 a barrel
Gold (GC=F): 1dolar1 9.50 (-0.52 %) to $1,817.30 per ounce
10-year Treasury (TNX): +0.5 bps to yield 1.163%
6:03 p.m. ET Thursday: Stock futures tick higher
Here’s where marketplaces were trading Thursday as overnight trading kicked off:
S&P 500 futures (ES=F): 3,904.50, down 7.5 points or 0.19%
Dow futures (YM=F): 31,327.00, down thirty two points or 0.1%
Nasdaq futures (NQ=F): 13,703.5, printed 25.5 points or even 0.19%