US Equities Rebound, On Track For Weekly Gains: Energy And Financial Sectors Outperform

In the last session of the month, the stock market as a whole is in the green, with all major indices, except the Russell 2000, on track to post weekly gains, supported by strong corporate earnings. 

The Fed’s favorite inflation gauge — the core price consumption expenditure index — came in at 4.6% in March, down from the 4.7% a month earlier but slightly above expectations of 4.5%.

Despite this potentially dampening expectations for Fed rate cuts in the near future, investors continue to exhibit a strong level of risk appetite. 

Cues From Friday's Trading:

The major averages were higher on Friday, except for the tech-heavy Nasdaq 100, which was flat on the day. 

The S&P 500 gained 0.6%, the Dow Industrial Average was up 0.7% and small caps in the Russell 2000 soared 1.1%. 

Analyst Color:

Gina Bolvin, president of Bolvin Wealth Management Group, said that the latest PCE data "may throw a monkey wrench into markets expectations of pause in June." According to the expert, if Powell reiterates "more work to be done," the market might very likely tumble back down, damaging growth-oriented equities and interest-rate sensitive assets such as technology and bonds.

Friday's Trading In Major US Equity ETFs: In midday trading on Friday, the SPDR S&P 500 ETF Trust SPY was 0.6% higher to $414.80, the SPDR Dow Jones Industrial Average ETF DIA rose 0.7% to $340.28 and the Invesco QQQ Trust QQQ was 0.1% higher to $320.63, according to Benzinga Pro data.

Nine out of the 11 S&P sectors were in the green for the session, except for the Consumer Discretionary Select Sector SPDR Fund XLY, down 0.05%, and the Metals and Mining Select Sector SPDR Fund XME, down 0.3%. 

The Energy Select Sector SPDR Fund XLK was the outperformer, up by 2%, followed by the Financial Select Sector SPDR Fund XLF, the Industrials Select Sector SPDR Fund XLI and the Real Estate Select Sector SPDR Fund XLRE each with 1.2% gain. 

Latest Economic Data:

• PCE Price Index year-on-year for March (4.2% vs. 5.1% previous and 4.6% expected)
• PCE Price Index month-on-month (0.1% vs. 0.3% previous)
• Core PCE Price Index YoY for March (4.6%, vs. 4.7% previous and 4.5% expected)
• Core PCE Price Index month-on-month for March (0.3%, vs. 0.3% previous and 0.3% expected)

• Personal Spending MoM for March (0%, vs. 0.1% previous and -0.1% expected)

• Personal Income MoM (0.3% vs. 0.3% previous and 0.2% expected)

• Chicago PMI for April (48.6 vs. 43.8 previous and 43.5 expected)

• Michigan Consumer Sentiment final reading for April (confirmed at 63.5 vs. 63.5 preliminary)

• Michigan Consumer Expectations final (revised down from 61.8 preliminary to 60.5)

• Michigan Current Conditions final (revised up from 66 to 68.8) 

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Stocks In Focus:

• Amazon, Inc. AMZN moved down over 3%, despite reporting better-than-expected results last quarter, after the company hinted at a further slowdown in its cloud business.
• Charter Communications, Inc. CHTR soared 8%, after surging 6.9% on Thursday, despite the company's missed earnings expectations but signaled strong wireless growth. 
• Mondelez International, Inc. MDLZ climbed 5%, after posting better-than-predicted results in Q1, and following UBS and Bank of America raising their price targets for the stock. 
• Pinterest, Inc. PINS dropped 19% as the company reported lower EPS from the same quarter in 2022. 
• First Republic Bank FRC plummeted another 35%, after a report U.S. officials are coordinating rescue talks. 
• Intel Corp. INTC rose over 4% in reaction to its forecast-beating results.
• First Solar, Inc. FSLR fell 12% following lower-than-expected earnings last quarter. 
• Exxon Mobil Corp. XOM rose 2% testing its all-time highs set in February, after the company reported better-than-predicted results in Q1. 
• Cloudflare, Inc. NET tumbled 23% as revenues missed expectations and Goldman Sachs lowered its price target from $51 to $38. 
• Snap, Inc. SNAP fell 19% after missing revenue estimates, and Guggenheim adjusted the price target from $12 to $9. 
• Colgate-Palmolive Co. CL rose 4% amid better-than-expected results in Q1. 

Commodities, Bonds, Other Global Equity Markets:

Crude oil gained 1.9%, with a barrel of WTI-grade crude dropping to $76.2. The United States Oil Fund ETF USO was 1.9% higher to $67 per share.  

Treasury yields fell markedly, with the 10-year yield down by 8 basis points to 3.44% and the two-year yield down 4 basis points to 4.04%. The iShares 20+ Year Treasury Bond ETF TLT was 1.8% higher on the day. 

The dollar slightly strengthened, with the U.S. dollar index, which is tracked by the Invesco DB USD Index Bullish Fund ETF UUP, up 0.2%. The EUR/USD pair, which is tracked by the Invesco CurrecyShares Euro Currency Trust FXE, was flat at 1.1025.

European equity indices were mixed. The iShares MSCI Eurozone ETF EZU fell 0.2%. 

Gold rose 0.2% to $1,991/oz. The SPDR Gold Trust GLD was 0.25% up to $185. Silver ticked 0.1% up to $24.95, with the iShares Silver Trust SLV rising 0.2% to $22.94 per share. Bitcoin BTC/USD fell 0.8% to $29,268.

Staff writer Piero Cingari updated this report midday Thursday. 

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