Stocks finished 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 ended just 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 more than 1 % and pull back from a record extremely high, after the company posted a surprise quarterly benefit and cultivated Disney+ streaming prospects much more than expected. Newly public business 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 benefits, with corporate profits rebounding faster than expected despite the continuous pandemic. With over 80 % of companies right now having reported fourth-quarter results, S&P 500 earnings per share (EPS) have topped estimates by 17 % in aggregate, and bounced back above pre COVID levels, based on an analysis by Credit Suisse analyst Jonathan Golub.
“Prompt and generous government activity mitigated the [virus-related] injury, leading to outsized economic and earnings surprises,” Golub said. “The earnings recovery has been considerably more effective than we may have imagined when the pandemic first took hold.”
Stocks have continued to set fresh record highs against this backdrop, and as monetary and fiscal policy assistance stay robust. But as investors become used to firming business functionality, companies may have 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 much more astute assessments of specific stocks, based on some strategists.
“It is actually no secret that S&P 500 performance has long been very powerful over the past several calendar years, driven mostly via valuation development. But, with the index P/E [price-to-earnings ratio] recently eclipsing its prior dot-com extremely high, we believe that valuation multiples will begin to compress in the coming months,” BMO Capital Markets strategist Brian Belski wrote in a note Thursday. “According to the job of ours, strong EPS growth is going to be necessary for the next leg greater. Thankfully, that’s precisely what existing expectations are forecasting. Nevertheless, we additionally found that these types of’ EPS-driven’ periods tend to be tricky from an investment strategy standpoint.”
“We believe that the’ easy money days’ are more than for the time being and investors will need to tighten up the aim of theirs by evaluating the merits of specific stocks, rather than chasing the momentum laden practices which have just recently dominated the investment landscape,” he added.
4:00 p.m. ET: Stocks end higher, S&P 500 and Nasdaq reach history closing highs
Here’s 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 represents the first with President Joe Biden in the White House, bringing a 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 thus far, according to 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 (twenty eight), tax policy (20 ) and COVID-19 policy (19) have been cited or perhaps discussed by probably the highest number of companies through this point in time in 2021,” Butters wrote. “Of these twenty eight firms, 17 expressed support (or perhaps a willingness to work with) the Biden administration on policies to reduce carbon as well as greenhouse gas emissions. These 17 corporations either discussed initiatives to reduce their own carbon as well as greenhouse gas emissions or maybe products or services they give to support clientele & customers lower the carbon of theirs and greenhouse gas emissions.”
“However, four companies also expressed some concerns about the executive order establishing a moratorium on new engine oil and gas leases on federal lands (and offshore),” he added.
The list of 28 companies discussing climate change as well as energy policy encompassed companies from an extensive array of industries, like JPMorgan Chase, United Airlines Holdings and 3M, alongside conventional oil majors as Chevron.
11:36 a.m. ET: Stocks combined, 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 suddenly plunges to a six month lower in February: U. Michigan
U.S. consumer sentiment slid to probably the lowest level since August in February, according to the Faculty of Michigan’s preliminary month to month survey, as Americans’ assessments of the road ahead for the virus-stricken economy unexpectedly grew more grim.
The headline consumer sentiment index dipped to 76.2 from 79.0 in January, sharply losing out on expectations for a surge to 80.9, according to Bloomberg consensus data.
The complete loss in 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 their current 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 lessen fiscal hardships among those with probably the lowest incomes. A lot more surprising was the finding that customers, despite the expected passage of a massive 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 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 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 cash just simply saw 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 money 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. tiny cap inflows saw their third largest week at $5.6 billion.
Bank of America warned that frothiness is rising in markets, nonetheless, as investors keep on piling into stocks amid low interest rates, and hopes of a solid 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
The following were the main 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 0.2%
Dow futures (YM=F): 31,305.00, down fifty four points or even 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’s in which marketplaces were trading Thursday as overnight 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%