Stocks concluded 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 concluded only a tick above the flatline. U.S. stocks shook off earlier declines after following 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 profits to fall greater than 1 % and guide back out of a record extremely high, after the company posted a surprise quarterly benefit and grew Disney+ streaming prospects more than expected. Newly public business Bumble (BMBL), which started trading on the Nasdaq on Thursday, rose another 7 % after jumping sixty three % in its public debut.
Over the older couple weeks, investors have absorbed a bevy of stronger than expected earnings benefits, with corporate earnings rebounding way quicker than expected despite the ongoing pandemic. With more than eighty % of companies these days having claimed fourth quarter results, S&P 500 earnings per share (EPS) have topped estimates by seventeen % for aggregate, and bounced back above pre COVID amounts, based on an analysis by Credit Suisse analyst Jonathan Golub.
good government behavior 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 thought possible when the pandemic first took hold.”
Stocks have continued to set new record highs against this backdrop, and as monetary and fiscal policy assistance remain strong. But as investors come to be used to firming corporate performance, companies might have to top greater expectations in order to be rewarded. This could in turn put some pressure on the broader market in the near-term, and also warrant more astute assessments of specific stocks, in accordance with some strategists.
“It is actually no secret that S&P 500 performance continues to be quite powerful over the past few calendar years, driven mainly via valuation development. But, with the index P/E [price-to-earnings ratio] recently eclipsing its prior dot com extremely 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 would be important for the next leg higher. Fortunately, that’s precisely what present expectations are forecasting. Nevertheless, we also realized that these sorts of’ EPS-driven’ periods tend to become more challenging from an investment strategy standpoint.”
“We think that the’ easy money days’ are actually over for the time being and investors will have to tighten up the aim of theirs by evaluating the merits of specific stocks, as opposed to chasing the momentum-laden practices that have just 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 is exactly where the main 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’ is the most cited Biden policy on company earnings calls: FactSet
Fourth-quarter earnings season marks the pioneer with President Joe Biden in the White House, bringing an innovative 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, based on an analysis from FactSet’s John Butters.
“In terms of government policies mentioned in conjunction with the Biden administration, climate change as well as energy policy (twenty eight), tax policy (20 COVID-19 and) policy (19) have been cited or perhaps reviewed by probably the highest number of businesses through this point in time in 2021,” Butters wrote. “Of these twenty eight companies, seventeen expressed support (or a willingness to your workplace with) the Biden administration on policies to reduce carbon and greenhouse gas emissions. These seventeen companies possibly discussed initiatives to reduce their own carbon as well as greenhouse gas emissions or perhaps merchandise or services they give to assist clients and customers reduce their carbon and greenhouse gas emissions.”
“However, four companies also expressed a number of concerns about the executive order setting up 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 diverse array of industries, including JPMorgan Chase, United Airlines Holdings and 3M, alongside standard oil majors like Chevron.
11:36 a.m. ET: Stocks mixed, S&P 500 and Nasdaq turn positive
Here’s 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 yield 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 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 suddenly grew much more grim.
The headline consumer sentiment index dipped to 76.2 from 79.0 in January, sharply losing out on expectations for a rise to 80.9, as reported by Bloomberg consensus data.
The complete loss of February was “concentrated in the Expectation Index and among households with incomes under $75,000. Households with incomes in the bottom third reported significant setbacks in their present finances, with fewer of these households mentioning latest income gains than whenever after 2014,” Richard Curtin chief economist for the university’s Surveys of Consumers, said in a statement.
“Presumably a new round of stimulus payments will bring down fiscal hardships among those with probably the lowest incomes. More surprising was the finding that consumers, despite the expected passage of a large 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 in which 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 funds simply saw their largest-ever week of inflows for the period ended February 10, 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 profit during the week, the firm added.
Tech stocks in turn saw their own record week 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. smaller cap inflows saw the third-largest week of theirs at $5.6 billion.
Bank of America warned that frothiness is actually rising in markets, nonetheless, as investors keep on piling into stocks amid low interest rates, as well as hopes of a solid recovery for the economy and corporate profits. The firm’s proprietary “Bull and 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
The following were the primary actions 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 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 is where markets were trading Thursday as over night trading kicked off:
S&P 500 futures (ES=F): 3,904.50, printed 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, down 25.5 points or 0.19%