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 nation.
Shares of Dow component Disney (DIS) reversed earlier gains to fall more than one % and pull back from a record high, after the company posted a surprise quarterly benefit and produced Disney+ streaming subscribers more than expected. Newly public business Bumble (BMBL), which began 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 results, with company profits rebounding faster than expected regardless of the continuous pandemic. With at least eighty % of businesses now having reported fourth-quarter outcomes, S&P 500 earnings per share (EPS) have topped estimates by seventeen % for aggregate, and bounced back above pre COVID levels, 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 effective than we may have imagined when the pandemic for starters took hold.”
Stocks have continued to set fresh record highs against this backdrop, and as monetary and fiscal policy support remain robust. But as investors come to be used to firming business functionality, businesses 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 warrant more astute assessments of individual stocks, in accordance with some strategists.
“It is actually no secret that S&P 500 performance has long been pretty powerful over the past few calendar years, driven primarily through valuation expansion. Nonetheless, with the index P/E [price-to-earnings ratio] recently eclipsing its prior dot-com extremely high, we believe 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 necessary for the following leg higher. Thankfully, that’s precisely what existing expectations are forecasting. But, we also realized that these sorts of’ EPS-driven’ periods tend to be more challenging from an investment strategy standpoint.”
“We think that the’ easy money 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, rather than chasing the momentum-laden strategies that have recently dominated the expense landscape,” he added.
4:00 p.m. ET: Stocks end higher, S&P 500 and Nasdaq reach history closing highs
Here is exactly 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’ would be the most-cited Biden policy on corporate earnings calls: FactSet
Fourth-quarter earnings season signifies the 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 corporate earnings calls so far, based on an analysis from FactSet’s John Butters.
“In terms of government policies discussed in conjunction with the Biden administration, climate change and energy policy (twenty eight), tax policy (twenty COVID-19 and) policy (19) have been cited or reviewed by the highest number of companies with this point in time in 2021,” Butters wrote. “Of these 28 companies, seventeen expressed support (or even a willingness to the office with) the Biden administration on policies to reduce carbon as well as greenhouse gas emissions. These seventeen firms both discussed initiatives to reduce the own carbon of theirs as well as greenhouse gas emissions or maybe merchandise or services they give to help clients & customers lower their carbon and greenhouse gas emissions.”
“However, four companies also expressed some concerns about the executive order setting up a moratorium on new engine oil and gas leases on federal lands (and offshore),” he added.
The list of 28 firms discussing climate change as well as energy policy encompassed organizations from an extensive array of industries, like 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 where 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 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 once a month 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 lacking 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 below $75,000. Households with incomes in the bottom third reported significant setbacks in the current 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 brand new round of stimulus payments will lessen fiscal hardships with those with the lowest incomes. More surprising was the finding that customers, despite the likely passage of a grand stimulus bill, viewed prospects for the national economy less favorably in early February than more month,” he added.
9:30 a.m. ET: Stocks open lower, but pace toward posting weekly gains
Here is in which markets had been trading just 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 just simply discovered 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 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 their second largest week 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 actually rising in markets, nevertheless, as investors keep on piling into stocks amid low interest rates, and hopes of a strong recovery for the economy and corporate earnings. 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 main 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 0.17%
Nasdaq futures (NQ=F): 13,711.25, printed 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 yield 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 0.19%
Dow futures (YM=F): 31,327.00, down 32 points or even 0.1%
Nasdaq futures (NQ=F): 13,703.5, down 25.5 points or even 0.19%