Zinger Key Points
- The S&P 500 index is up 3% on the week, on course for he strongest weekly performance in 2023.
- Core PCE inflation came in lower than expected in February, raising hopes of a Fed pivot.
The stock market extended its rally on Friday and is on track to close the best week of 2023, fueled by encouraging news in the fight against inflation.
The U.S. core personal consumption expenditures price index, the Fed's preferred inflation indicator, came in below estimates at 4.6%.
Cues From Friday's Trading:
All major U.S. equity indices were in the green, with the S&P 500 up 0.9% to 4,085, the highest since Feb. 16.
The tech-heavy Nasdaq 100 index crossed above 13,000 points, up 0.9%, while the Nasdaq composite index was 1.2% higher. Tech stocks reported the second-best quarter (up 19%) over the last decade.
Small-caps also rallied, with the Russell 2000 index gaining 1.9%. Blue-chip shares in the Dow Jones Industrial Average rose 0.9%.
| Index | Performance (+/-) | Value | |
|---|---|---|---|
| Nasdaq Composite | +1.2% | 12,150.98 | |
| S&P 500 Index | +0.9% | 4,087.28 | |
| Dow Industrials | +0.9% | 33,146.76 |
Analyst Color:
Bank of America said the PCE data supports its view that the Fed will hike by 25bp in May, before going on hold.
Friday's Trading In Major Equity ETFs:
In midday trading Friday, the SPDR S&P 500 ETF Trust SPY climbed 0.9% to $407.32, the SPDR Dow Jones Industrial Average ETF DIA was up 0.9% to $331.28 and the Invesco QQQ Trust QQQ moved up 1% to $319, according to Benzinga Pro data.
All U.S. equity sectors showed gains. The Consumer Discretionary Select Sector SPDR Fund XLY gained 2% on the day, followed by the the Communication Services Select Sector SPDR Fund XLC, up by 1.2%. Defensive sectors undeperformed, with the Consumer Staples Select Sector SPDR Fund XLP up 0.3% and the Utilities Select Sector SPDR Fund XLU up by 0.1%
Latest Economic Data:
The headline PCE inflation rose 5% in February, down from 5.4% in January and a 2022 high of 6.8% in June. The February PCE reading came in below economist estimates of a 5.3% gain. Core PCE, which excludes volatile food and energy prices and is the preferred inflation measure for the Federal Reserve, was up 4.6% in February, below economist estimates of a 4.7% gain.
The University of Michigan Consumer Confidence Index was revised downward from an original estimate of 63.2 to 62 points in March on Friday — down by 5 points or 8.8% from February. Read more here.
The Chicago Business Barometer, generally known as the Chicago PMI, rose for the first time this year, from 43.6 points in February to 43.8 points in March 2023, above estimates of 43.4, according to the Insitute for Supply Management.
New York Fed President John Williams, a Federal Open Market Committee member, will make a public appearance at 3:04 p.m. EDT.
See also: How To Trade Futures
Stocks In Focus:
The rate-sensitive Tesla, Inc. TSLA rose 5% on the day, as investors welcomed a lower-than-expected core PCE print.
Digital World Acquisition Corp. DWAC, the SPAC which has agreed to merge with Trump’s Truth Social parent, climbed 6%, potentially on the news of the former president’s indictment. Rumble Inc. RUM rallied over 7%.
EV Maker Canoo, Inc. GOEV fell over 3.6% after the company reported fourth-quarter results and also announced a $1.5-million settlement with the SEC.
Nikola Corp. NKLA fell over 11% after the beleaguered EV truck maker announced a common stock offering.
BlackBerry Limited BB rose over 15%, on pace for the largest rise since June 2022 amid an improved outlook.
Top Analysts’ Call
JD.com, Inc. JD: Loop Capital downgrades from Buy to Hold and cuts price target from $49 to $82
Restraurant Brands International, Inc. QSR: TD Cowen upgrades from Market Perform to Outperform and increases price target from $72 to $75
Nvidia Corp. NVDA: Tigress Financial reiterates at Buy and increases price target from $250 to $320
Commodities, Bonds, Forex, and Other Global Equity Markets:
Crude oil extended its gains, with a barrel of WTI-grade crude rising to $75.90, up 1.7% on the day and 9% on the week.
The benchmark 10-year Treasury yield was flat at 3.55%. The yield on the two-year yield Treasury Note was also stable at 4.1%.
The dollar recovered some ground against the euro, with EUR/USD dropping 0.4% to 1.086.
Major European equity indices closed in the green. The iShares MSCI Eurozone ETF EZU was up 0.3% on the day and 5% for the week.
Gold was marginally lower, down 0.1% to $1,977/oz. The SPDR Gold Trust GLD was down 0.2% to 183.73. Silver rose 0.9% to $24.11, with the iShares Silver Trust SLV up 1% to 22.2. Bitcoin rose 1.3% to 28,406.
Staff writer Piero Cingari updated this story midday Friday.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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