Wall Street’s major averages made small moves on Friday, with investors taking stock of more quarterly reports while looking ahead to an eventful week chock-full of heavyweight company results and central bank policy meetings.
By late afternoon, the tech-heavy Nasdaq Composite EETFCOMP was up 0.37% to 14,115.31 points, while the benchmark S&P 500 was higher by 0.44% to 4,554.66 points. Both indexes sold-off the previous day, with the former posting hefty losses on the back of a slide in Netflix and Tesla following their disappointing earnings.
The Dow
added 0.32% to 35,338.69 points, with the blue-chip index on track to post a ten-day win-streak.
On a weekly basis, the Dow and S&P were set for strong gains, with the former having risen 2.40% and the latter having risen 1.09%. The Nasdaq was largely unchanged.
Of the 11 S&P sectors, nine were trading in the green, led by Utilities and Health Care. Communication Services and Industrials were the two losers.
Treasury yields stabilized after surging in Thursday’s session, partly due to economic data that showed a continued fall in initial jobless claims. The longer-end 10-year yield was down 2 basis points to 3.83%, while the more rate-sensitive 2-year yield was flat at 4.84%.
In the previous session more bond selling “than usual was seen for a change, in particular out of Asia,” ING said. “This was a factor in unleashing Treasury yields higher. The low jobless claims number pushed in the same direction, but would not have been enough as a stand-alone to push the 10yr yield from 3.75% to 3.85%. And other data today has in fact been quite muted or negative for the economy.”
Inflation numbers out of Japan garnered attention globally and at home. Japan’s core consumer inflation stayed well above the central bank’s 2% target for the fifteenth consecutive month, putting pressure on the Bank of Japan’s policy of ultra-low interest rates. The bank is reportedly unlikely to make changes to its yield curve control program at its policy meeting next week.
The European Central Bank (ECB) and the Federal Reserve will also be holding their meetings, and both are expected to hike rates by 25 basis points each.
“The Fed and the ECB are likely to deliver the 25bp hike priced by the market; but the focus will be on the guidance for the September meeting. Both central banks should struggle to provide strong guidance and be at peak data dependence,” Deutsche Bank analysts said in a preview note on Thursday.
“Beyond July, slowing inflation should allow the Fed to end its hiking cycle and the market to price rate cuts in 2024, if only to keep real rates constant. However, a power steepening of the U.S. curve is likely to require evidence of weakness in the labor market,” the analysts added.
The economic calendar is empty for today, but there could be more than usual volatility. Along with the coming expiration of options, this is the last session for passive investors to account for the Nasdaq 100
NDX extraordinary rebalance where weightings will be dropped for the Magnificent Seven megacaps. The rebalance happens after the bell in time for trading Monday.
Friday’s quarterly results included reports from credit card firm and Dow 30 component American Express
SP500.
Among active movers, Trump SPAC Digital World Acquisition
DWAC soared amid trading halts after a settlement with the U.S. market regulator in connection with its probe into the SPAC’s deal to take Donald Trump’s social media company public.
