Stocks look jaded after their record run, with the stock futures pointing to a modestly lower opening in the week’s final trading session. Given the recent gains, some consolidation can be expected before traders plot their next move. Analysts have been sounding out optimism over the broadening of the market rally as small-cap stocks join the party.
Specifically, on Friday, traders could stay focused on a slew of Fed speeches, trying to read between the lines and draw cues regarding what the central bank could do at the March meeting. A couple of manufacturing activity data and a consumer sentiment reading may also be on investors’ radar. Bond yields dipped as traders reassessed their rate-cut odds after the inflation data.
Cues From Thursday’s Trading Session
U.S. stocks advanced on Thursday as the Fed’s preferred inflation gauge – the core personal consumption expenditure index aligned with expectations. The mixed earnings news flow also dictated market sentiment.
The major indices opened higher, encouraged by the inflation component of the January personal income and spending report. But the optimism tempered through the morning, with the Dow Industrials trading mostly below the unchanged line. The 30-stock blue-chip average moved decisively above the unchanged in the final hour of trading as it snapped a three-session losing streak. Yet it closed off its all-time highs.
The Nasdaq Composite and the S&P 500 Index returned their gains and briefly dipped below the unchanged line in the mid-session before recovering and taking off in the afternoon. Both averages ended in unchartered territory, with the former scaling its previous closing high of 16,057.44 set on Nov. 19, 2021.
Eight of the 11 S&P 500 sectors closed in the green, with communication services, consumer discretionary, IT, material, and real estate stocks leading from the front. On the other hand, consumer staple and healthcare stocks fell sharply, and financial stocks closed with a slight negative bias.
Small-caps rebounded from their previous session’s losses. After trading solidly higher in early trading, they gave back much of their gains over the course of the session and yet closed moderately higher.
| Index | Performance (+/-) | Value |
| Nasdaq Composite | +0.90% | 16,091.92 |
| S&P 500 Index | +0.52% | 5,096.27 |
| Dow Industrials | +0.12% | 38,996.39 |
| Russell 2000 | +0.71% | 2,054.84 |
Analyst Color:
The S&P 500 Index has acquitted itself creditably and is now trading well above the level it was it before the Fed began hiking rates in March 2022, said Creative Planning Chief Market Strategist Charlie Bilello.
Carol Schleif, Chief Investment Officer at BMO Family Office, expressed optimism regarding the broadening of the market rally. In an interview with CNBC, the analyst said, “It is positive that you're seeing a broadening out of all the market indexes away from just that Magnificent 7.” When the Fed starts cutting rates, most small-caps, most of which are debt-laden, will begin to move primarily on what their business plans, she said.
Futures Today
Futures Performance On Friday ( as of 6 a.m. ET)
| Futures | Performance (+/-) |
| Nasdaq 100 | -0.23% |
| S&P 500 | -0.24% |
| Dow | -0.35% |
| R2K | +0.12% |
In premarket trading on Friday, the SPDR S&P 500 ETF Trust SPY slipped 0.27% to $504.90 and the Invesco QQQ ETF QQQ fell 0.20% to $434.40, according to Benzinga Pro data.
Upcoming Economic Data:
The Fed speeches scheduled for Friday include:
- Richmond Fed President Thomas Barkin makes a TV appearance: 8:30 a.m. ET
- Chicago Fed President Austan Goolsbee makes a TV appearance: 10 a.m. ET
- Fed Governor Christopher Waller: 10:15 a.m. ET
- Dallas Fed President Lorie Logan: 10:15 a.m. ET
- Atlanta Fed President Raphael Bostic: 12:15 p.m. ET
- San Francisco Fed President Mary Daly: 1:30 p.m. ET
- Fed Governor Adriana Kugler: 3:30 p.m. ET
S&P Global will release the final U.S. manufacturing purchasing managers’ index at 9:45 a.m. ET, with the flash reading released earlier this month coming in at 51.5 for February, up from 50.7 in January.
The Institute of Supply Management’s manufacturing PMI is due at 10 a.m. ET is expected to edge up from 49.1 in January to 49.5 in February.
The University of Michigan’s final consumer sentiment index for February will likely be left unrevised at the flash reading of 79.6 compared to 79 in January. Traders may also look forward to inflation expectations readings from the report.
The Commerce Department is due to release its construction spending report for January at 10 a.m. ET. Economists, on average, expect construction spending to increase 0.2% month-over-month, slower than the 0.9% increase in December.
See also: Best Futures Trading Software
Stocks In Focus:
- NetApp, Inc. NTAP climbed over 16.50% in premarket trading following its earnings announcement.
- Other stocks moving on earnings include Autodesk, Inc. ADSK (nearly 9%), Cooper Companies, Inc. COO (nearly 7%), Fisker, Inc. FSR (down about 40%), Zscaler, Inc. ZS (down about 7%), Hewlett Packard Enterprises Company HPE (down over 6%), and SoundHound AI, Inc. SOUND (down about 20%).
- Plug Power, Inc. PLUG and EchoStar Corporation SATS are among the major names scheduled to release their quarterly results ahead of the market open.
- Chinese electric-vehicle startup Li Auto, Inc. LI fell about 2.70%, while peers XPeng, Inc. XPEV and Nio, Inc. NIO rose over 2% and 1%, respectively, after the release of February deliveries numbers.
Commodities, Bonds, Other Global Equity Markets:
Crude oil futures rose 1.06% to $79.09 in early European session on Friday after the commodity fell 0.36% on Thursday. The yield on the benchmark 10-year Treasury note fell 0.023 percentage points at 4.229%.
Most Asian markets advanced on Friday, led by the Japanese and Indian markets. The positive sentiment on Wall Street overnight proved contagious, generating strength in the domestic markets. The Indonesian, Singaporean, and Taiwanese markets clocked modest losses, while the South Korean market remained closed for a public holiday.
European stocks were mixed in early trading on Friday.
Bitcoin BTC/USD is having an off day on Friday, as it has pulled back from the $63,000+ level it traded in the previous session.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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