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 aproximatelly 0.5 %, even though the Dow finished just 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 country.
Shares of Dow component Disney (DIS) reversed earlier benefits to fall greater than 1 % and take back out of a record extremely high, after the company posted a surprise quarterly profit and cultivated Disney+ streaming subscribers more than expected. Newly public business 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 stronger than expected earnings results, with corporate earnings rebounding way quicker than expected regardless of the ongoing pandemic. With at least 80 % of companies these days having claimed fourth-quarter outcomes, S&P 500 earnings per share (EPS) have topped estimates by seventeen % in aggregate, and bounced back above pre COVID amounts, according to an analysis by Credit Suisse analyst Jonathan Golub.
“Prompt and good government activity mitigated the [virus related] injury, leading to outsized economic and earnings surprises,” Golub said. “The earnings recovery has been substantially more effective than we might have thought possible when the pandemic first took hold.”
Stocks have continued to set fresh record highs against this backdrop, and as monetary and fiscal policy support stay strong. But as investors become comfortable with firming corporate performance, businesses might need to top even greater expectations in order to be rewarded. This could in turn put some pressure on the broader market in the near term, as well as warrant much more astute assessments of individual stocks, according to some strategists.
“It is actually no secret that S&P 500 performance has long been very powerful over the past few calendar years, driven primarily via valuation expansion. Nonetheless, with the index P/E [price-to-earnings ratio] recently eclipsing its prior dot com high, we think that valuation multiples will begin to compress in the coming months,” BMO Capital Markets strategist Brian Belski wrote in a note Thursday. “According to our job, strong EPS growth is going to be important for the next leg higher. Fortunately, that’s precisely what present expectations are forecasting. Nonetheless, we also found that these sorts of’ EPS-driven’ periods tend to become more tricky from an investment strategy standpoint.”
“We assume that the’ easy cash days’ are over for the time being and investors will need to tighten up their focus by evaluating the merits of individual stocks, rather than chasing the momentum laden methods that have recently dominated the investment 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 finished 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 represents the very first with President Joe Biden in the White House, bringing a 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 up to this point, according to 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 reviewed by probably the highest number of companies through this point on time in 2021,” Butters wrote. “Of these twenty eight companies, 17 expressed support (or a willingness to your workplace with) the Biden administration on policies to greatly reduce carbon as well as greenhouse gas emissions. These seventeen corporations both discussed initiatives to reduce the own carbon of theirs and greenhouse gas emissions or perhaps services or items they provide to support clientele and customers lower their carbon 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 28 companies discussing climate change and energy policy encompassed companies from a broad array of industries, like JPMorgan Chase, United Airlines Holdings and 3M, alongside traditional oil majors as Chevron.
11:36 a.m. ET: Stocks mixed, S&P 500 and Nasdaq turn positive
Here’s in which markets 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 suddenly plunges to a six month lower in February: U. Michigan
U.S. consumer sentiment slid to the lowest level since August in February, according to the Faculty of Michigan’s preliminary monthly survey, as Americans’ assessments of the road ahead for the virus-stricken economy unexpectedly grew more grim.
The title consumer sentiment index dipped to 76.2 from 79.0 in January, sharply losing out on expectations for an increase to 80.9, as reported by Bloomberg consensus data.
The whole loss in February was “concentrated in the Expectation Index and among households with incomes below $75,000. Households with incomes of the bottom third reported significant setbacks in the present finances of theirs, with fewer of these households mentioning recent income gains than whenever since 2014,” Richard Curtin chief economist for the university’s Surveys of Consumers, said in a statement.
“Presumably a new round of stimulus payments will reduce financial hardships with those with the lowest incomes. More surprising was the finding that customers, despite the expected passage of a large 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’s in which markets had been 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 deliver 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 simply saw the largest ever week of theirs of inflows for the period ended February ten, with inflows totaling a record $58.1 billion, according to Bank of America. Investors pulled a total of $800 million out of gold and $10.6 billion out of cash during the week, the firm added.
Tech stocks in turn saw their own record week 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 their third largest week at $5.6 billion.
Bank of America warned that frothiness is rising in markets, however, as investors continue piling into stocks amid low interest rates, along with hopes of a good recovery for the economy and corporate profits. The firm’s proprietary “Bull as well as Bear Indicator” tracking 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 principle moves 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 even 0.17%
Nasdaq futures (NQ=F): 13,711.25, printed 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 is where marketplaces were trading Thursday as over night trading kicked off:
S&P 500 futures (ES=F): 3,904.50, down 7.5 points or even 0.19%
Dow futures (YM=F): 31,327.00, down 32 points or even 0.1%
Nasdaq futures (NQ=F): 13,703.5, printed 25.5 points or perhaps 0.19%