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 concluded simply 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 nation.
Shares of Dow component Disney (DIS) reversed earlier gains to fall greater than one % and pull back from a record high, after the company posted a surprise quarterly benefit and grew 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 63 % 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 despite the continuous pandemic. With at least eighty % of companies right now having reported fourth quarter outcomes, S&P 500 earnings per share (EPS) have topped estimates by 17 % in aggregate, and bounced back above pre-COVID levels, in accordance with an analysis by Credit Suisse analyst Jonathan Golub.
good government behavior and “Prompt mitigated the [virus-related] injury, leading to outsized economic and earnings surprises,” Golub said. “The earnings recovery has been considerably more effective than we could have imagined when the pandemic for starters took hold.”
Stocks have continued to set fresh record highs against this backdrop, and as fiscal and monetary policy support stay strong. But as investors become accustomed to firming corporate performance, companies may have to top even bigger expectations in order to be rewarded. This can in turn put some pressure on the broader market in the near term, and also warrant much more astute assessments of specific stocks, in accordance with some strategists.
“It is actually no secret that S&P 500 performance has long been quite strong over the past few calendar years, driven primarily through valuation expansion. Nonetheless, with the index P/E [price-to-earnings ratio] recently eclipsing its previous 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 job, strong EPS growth is going to be necessary for the following leg greater. Thankfully, that’s exactly what current expectations are forecasting. However, we in addition found that these types of’ EPS-driven’ periods tend to be more challenging from an investment strategy standpoint.”
“We assume that the’ easy money days’ are more than for the time being and investors will need to tighten up the focus of theirs by evaluating the merits of individual stocks, rather than chasing the momentum laden practices who have recently dominated the investment landscape,” he added.
4:00 p.m. ET: Stocks end higher, S&P 500 and Nasdaq reach report closing highs
Here’s exactly 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 represents the first with President Joe Biden in the White House, bringing a brand new political backdrop for corporations to contemplate.
Biden’s policies around environmental protections as well as climate change 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 mentioned 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 discussed by probably the highest number of businesses through this point on time in 2021,” Butters wrote. “Of these twenty eight firms, seventeen expressed support (or perhaps a willingness to the office with) the Biden administration on policies to greatly reduce carbon as well as greenhouse gas emissions. These seventeen corporations both discussed initiatives to minimize their very own carbon as well as greenhouse gas emissions or perhaps services or goods they give to assist clients and customers reduce the carbon of theirs and greenhouse gas emissions.”
“However, 4 companies also expressed a number of concerns about the executive order starting a moratorium on new engine oil and gas leases on federal lands (plus offshore),” he added.
The list of twenty eight companies discussing climate change as well as energy policy encompassed organizations from a diverse array of industries, including JPMorgan Chase, United Airlines Holdings and 3M, alongside standard oil majors as Chevron.
11:36 a.m. ET: Stocks mixed, S&P 500 and Nasdaq turn positive
Here is in which marketplaces 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, in accordance with the University of Michigan’s preliminary monthly survey, as Americans’ assessments of the road forward for the virus-stricken economy unexpectedly grew much more grim.
The headline consumer sentiment index dipped to 76.2 from 79.0 in January, sharply lacking expectations for an increase to 80.9, as reported by Bloomberg consensus data.
The entire 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 major setbacks in their present finances, with fewer of the households mentioning latest income gains than anytime 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 the lowest incomes. Much 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 pace toward posting weekly gains
Here is in which marketplaces 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 yield 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, 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 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. tiny 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 keep on piling into stocks amid low interest rates, as well as hopes of a solid recovery for the economy and corporate earnings. 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
Below had been the primary moves in markets, as of 7:16 a.m. ET Friday:
S&P 500 futures (ES=F): 3,904.00, down 8.00 points or even 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 even 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 markets were trading Thursday as over night trading kicked off:
S&P 500 futures (ES=F): 3,904.50, printed 7.5 points or even 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 perhaps 0.19%