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 %, even though the Dow ended only 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 report 9.9 % in 2020 as a virus induced recession swept the country.
Shares of Dow component Disney (DIS) reversed earlier gains to fall more than 1 % and pull back from a record high, after the company posted a surprise quarterly benefit and produced Disney+ streaming prospects more than expected. Newly public company Bumble (BMBL), which set about trading on the Nasdaq on Thursday, rose another 7 % after jumping sixty three % in its public debut.
Over the past couple weeks, investors have absorbed a bevy of much stronger than expected earnings benefits, with corporate profits rebounding way quicker than expected despite the ongoing pandemic. With more than eighty % of companies right now having reported fourth quarter results, S&P 500 earnings per share (EPS) have topped estimates by seventeen % in aggregate, and bounced back above pre COVID amounts, in accordance with an analysis by Credit Suisse analyst Jonathan Golub.
generous government activity and “Prompt mitigated the [virus related] damage, leading to outsized economic and earnings surprises,” Golub said. “The earnings recovery has been considerably more powerful than we might have imagined when the pandemic first took hold.”
Stocks have continued to set new record highs against this backdrop, and as fiscal and monetary policy support remain strong. But as investors become accustomed to firming business performance, businesses may need to top even bigger expectations to be rewarded. This can in turn put some pressure on the broader market in the near-term, and warrant much more astute assessments of individual stocks, based on some strategists.
“It is actually no secret that S&P 500 performance has long been quite formidable over the past few calendar years, driven mainly through valuation development. However, with the index P/E [price-to-earnings ratio] recently eclipsing its prior dot-com 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 our job, strong EPS growth will be required for the following leg higher. Thankfully, that’s precisely what current expectations are forecasting. But, we additionally discovered that these types of’ EPS-driven’ periods tend to be tricky from an investment strategy standpoint.”
“We believe that the’ easy money days’ are over for the time being and investors will need to tighten up their focus by evaluating the merits of specific stocks, rather than chasing the momentum-laden methods which have just recently dominated the expense landscape,” he added.
4:00 p.m. ET: Stocks end higher, S&P 500 and Nasdaq reach report closing highs
Here is where the major 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’ will be the most cited Biden policy on company earnings calls: FactSet
Fourth-quarter earnings season marks the very first with President Joe Biden in the White House, bringing a brand new political backdrop for corporations to contemplate.
Biden’s policies around climate change as well as environmental protections have been the most cited political issues brought up on company earnings calls thus far, in accordance with an analysis from FactSet’s John Butters.
“In terms of government policies discussed in conjunction with the Biden administration, climate change as well as energy policy (twenty eight), tax policy (twenty COVID-19 and) policy (nineteen) have been cited or perhaps discussed by probably the highest number of businesses through this point on time in 2021,” Butters wrote. “Of these 28 companies, 17 expressed support (or even a willingness to the office with) the Biden administration on policies to greatly reduce carbon as well as greenhouse gas emissions. These 17 corporations both discussed initiatives to minimize their own carbon as well as greenhouse gas emissions or services or products they provide to help clients and customers reduce the carbon of theirs and greenhouse gas emissions.”
“However, 4 companies also expressed some concerns about the executive order establishing a moratorium on new oil as well as gas leases on federal lands (plus offshore),” he added.
The list of 28 companies discussing climate change and energy policy encompassed businesses from a broad array of industries, including JPMorgan Chase, United Airlines Holdings and 3M, alongside conventional oil majors like Chevron.
11:36 a.m. ET: Stocks combined, S&P 500 and Nasdaq turn positive
Here’s in which marketplaces had been 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 low in February: U. Michigan
U.S. consumer sentiment slid to probably the lowest level after August in February, in accordance with the University of Michigan’s preliminary month to month survey, as Americans’ assessments of the path ahead for the virus stricken economy suddenly grew more grim.
The headline consumer sentiment index dipped to 76.2 from 79.0 in January, sharply missing expectations for a surge to 80.9, based on Bloomberg consensus data.
The entire 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 current finances of theirs, with fewer of the households mentioning recent income gains than whenever 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 financial hardships among those with probably the lowest incomes. More surprising was the finding that customers, despite the expected passage of a grand stimulus bill, viewed prospects for the national economy less favorably in early February than last month,” he added.
9:30 a.m. ET: Stocks open lower, but pace toward posting weekly gains
Here is where markets were trading only 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 deliver 1.19%
9:05 a.m. ET: Equity funds see highest weekly inflows ever as investors pile into tech stocks: Bank of America
Stock cash just saw their largest-ever week of inflows for the period ended February 10, 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 money during the week, the firm added.
Tech stocks in turn saw the own record week of theirs of inflows during $5.4 billion. U.S. large cap stocks saw the second-largest week of theirs of inflows ever at $25.1 billion, and U.S. smaller cap inflows saw the third-largest week of theirs at $5.6 billion.
Bank of America warned that frothiness is rising in markets, nevertheless, as investors continue piling into stocks amid low interest rates, as well as hopes of a strong recovery for the economy and corporate earnings. 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
The following were the primary movements in markets, as of 7:16 a.m. ET Friday:
S&P 500 futures (ES=F): 3,904.00, printed 8.00 points or perhaps 0.2%
Dow futures (YM=F): 31,305.00, down 54 points or perhaps 0.17%
Nasdaq futures (NQ=F): 13,711.25, down 17.75 points or 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 deliver 1.163%
6:03 p.m. ET Thursday: Stock futures tick higher
Here is in which marketplaces were trading Thursday as over night trading kicked off:
S&P 500 futures (ES=F): 3,904.50, down 7.5 points or perhaps 0.19%
Dow futures (YM=F): 31,327.00, down 32 points or perhaps 0.1%
Nasdaq futures (NQ=F): 13,703.5, printed 25.5 points or perhaps 0.19%