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 about 0.5 %, while the Dow finished 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 gains to fall more than 1 % and take back from a record high, after the company posted a surprise quarterly benefit and grew Disney+ streaming subscribers more than expected. Newly public company Bumble (BMBL), which began trading on the Nasdaq on Thursday, rose another 7 % after jumping 63 % in its public debut.
Over the past couple weeks, investors have absorbed a bevy of much stronger than expected earnings results, with corporate earnings rebounding faster than expected inspite of the continuous pandemic. With at least eighty % of businesses now having claimed fourth-quarter results, 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 good government activity mitigated the [virus related] damage, leading to outsized economic and earnings surprises,” Golub said. “The earnings recovery has been substantially more robust than we could have thought possible 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 robust. But as investors become accustomed to firming business performance, businesses may need to top even bigger expectations to be rewarded. This may in turn put some pressure on the broader market in the near-term, as well as warrant more astute assessments of individual stocks, based on some strategists.
“It is actually no secret that S&P 500 performance has been pretty formidable over the past several calendar years, driven mostly via valuation development. However, with the index P/E [price-to-earnings ratio] recently eclipsing its previous 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 our work, strong EPS growth would be required for the next leg higher. Fortunately, that’s exactly what present expectations are forecasting. But, we additionally discovered that these types of’ EPS-driven’ periods tend to become more complicated from an investment strategy standpoint.”
“We believe that the’ easy cash days’ are over for the time being and investors will have to tighten up the focus of theirs by evaluating the merits of specific stocks, as opposed to 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 is exactly where the main 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 corporate earnings calls: FactSet
Fourth-quarter earnings season signifies the very first with President Joe Biden in the White House, bringing the latest political backdrop for corporations to contemplate.
Biden’s policies around climate change and 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 talked about in conjunction with the Biden administration, climate change as well as energy policy (28), tax policy (20 COVID-19 and) policy (19) have been cited or talked about by the highest number of companies through this point in time in 2021,” Butters wrote. “Of these 28 companies, 17 expressed support (or perhaps a willingness to work with) the Biden administration on policies to greatly reduce carbon as well as greenhouse gas emissions. These 17 companies either discussed initiatives to minimize the own carbon of theirs and greenhouse gas emissions or perhaps merchandise or services they give to assist customers & customers reduce the carbon of theirs and greenhouse gas emissions.”
“However, 4 companies also expressed a number of concerns about the executive order establishing a moratorium on new engine 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 organizations from an extensive array of industries, like 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 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, based on the University of Michigan’s preliminary monthly survey, as Americans’ assessments of the path forward for the virus stricken economy suddenly grew more grim.
The headline consumer sentiment index dipped to 76.2 from 79.0 in January, sharply losing out on expectations for an increase to 80.9, according to Bloomberg consensus data.
The complete loss of February was “concentrated in the Expectation Index and involving households with incomes below $75,000. Households with incomes in the bottom third reported considerable setbacks in their present finances, 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 probably the lowest incomes. More shocking 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 than last month,” he added.
9:30 a.m. ET: Stocks open lower, but pace toward posting weekly gains
Here’s in which marketplaces had been 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 actually as investors pile into tech stocks: Bank of America
Stock funds simply saw the largest ever week of theirs of inflows for the period ended February 10, with inflows totaling a record $58.1 billion, as reported by Bank of America. Investors pulled a total of $800 million out of gold and $10.6 billion out of cash throughout 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 the second-largest week of theirs of inflows ever at $25.1 billion, and U.S. small cap inflows saw the third-largest week of theirs at $5.6 billion.
Bank of America warned that frothiness is actually rising in markets, however, as investors keep on 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 and 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 had been the primary actions in markets, as of 7:16 a.m. ET Friday:
S&P 500 futures (ES=F): 3,904.00, down 8.00 points or 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 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 deliver 1.163%
6:03 p.m. ET Thursday: Stock futures tick higher
Here’s where markets had been 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 thirty two points or perhaps 0.1%
Nasdaq futures (NQ=F): 13,703.5, down 25.5 points or perhaps 0.19%