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 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 country.
Shares of Dow component Disney (DIS) reversed earlier profits to fall greater than 1 % and take back from a record high, after the company posted a surprise quarterly profit and produced Disney+ streaming subscribers much 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 company profits rebounding much faster than expected despite the ongoing pandemic. With at least eighty % of businesses right now having claimed fourth-quarter outcomes, S&P 500 earnings per share (EPS) have topped estimates by seventeen % in aggregate, and bounced back above pre-COVID amounts, in accordance with an analysis by Credit Suisse analyst Jonathan Golub.
“Prompt and generous government action 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 dreamed when the pandemic first took hold.”
Stocks have continued to set new record highs against this backdrop, and as monetary and fiscal policy assistance stay robust. But as investors become used to firming corporate performance, companies may have to top even bigger expectations in order to be rewarded. This could in turn put some pressure on the broader market in the near term, as well as warrant more astute assessments of specific stocks, in accordance with some strategists.
“It is no secret that S&P 500 performance continues to be quite powerful over the past several calendar years, driven mostly through 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 our job, strong EPS growth would be required for the next leg greater. Thankfully, that’s exactly what existing expectations are forecasting. Nevertheless, we in addition found that these kinds of’ EPS-driven’ periods tend to be more challenging from an investment strategy standpoint.”
“We believe that the’ easy money days’ are over for the time being and investors will have to tighten up their focus by evaluating the merits of individual stocks, as opposed to chasing the momentum laden methods which 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 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’ would be the most cited Biden policy on corporate earnings calls: FactSet
Fourth-quarter earnings season marks the pioneer with President Joe Biden in the White House, bringing a new 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 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 as well as energy policy (twenty eight), tax policy (twenty COVID-19 and) policy (19) have been cited or maybe talked about by probably the highest number of companies through this point in time in 2021,” Butters wrote. “Of these 28 companies, seventeen expressed support (or perhaps a willingness to the office with) the Biden administration on policies to greatly reduce carbon and greenhouse gas emissions. These 17 firms either discussed initiatives to reduce the own carbon of theirs and greenhouse gas emissions or maybe items or services they provide to assist customers and customers lower their carbon and greenhouse gas emissions.”
“However, four businesses 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 (and offshore),” he added.
The list of 28 companies 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 traditional oil majors like Chevron.
11:36 a.m. ET: Stocks mixed, S&P 500 and Nasdaq turn positive
Here is in which markets 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 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 a rise to 80.9, based on Bloomberg consensus data.
The complete loss of February was “concentrated in the Expectation Index and involving households with incomes under $75,000. Households with incomes of the bottom third reported considerable setbacks in the current finances of theirs, with fewer of the households mentioning recent income gains than anytime 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 bring down fiscal hardships with those with probably the lowest incomes. More shocking was the finding that consumers, 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 speed toward posting weekly gains
Here is where markets 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 just simply discovered the largest-ever week of theirs of inflows for the period ended February 10, 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 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. small cap inflows saw the third-largest week of theirs at $5.6 billion.
Bank of America warned that frothiness is rising in markets, nonetheless, as investors continue 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
Below had been the principle 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 fifty four points or even 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 in which markets were trading Thursday as overnight trading kicked off:
S&P 500 futures (ES=F): 3,904.50, down 7.5 points or perhaps 0.19%
Dow futures (YM=F): 31,327.00, down 32 points or 0.1%
Nasdaq futures (NQ=F): 13,703.5, down 25.5 points or even 0.19%