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U.S. stock benchmarks were on the rise Friday morning, and the S&P 500 briefly traded above its mid-November closing high, as investors brushed aside data showing consumer prices in November rose by the most in nearly four decades.
How are stock-index futures trading?
-
The S&P 500 index
SPX,
+0.46%
was up 0.7%, or 31 points, at 4,699, after touching an intraday peak at 4,705.38, above its Nov. 18 record closing high at 4,704.54. -
The Dow Jones Industrial Average
DJIA,
+0.31%
advanced 164 points, or 0.5%, to 35,919. -
The Nasdaq Composite Index
COMP,
+0.33%
rose 0.7%, or 96 points, to reach 15,609.
On Thursday, the Dow fell in the final moments of trading, dropping 0.06 point to 35,754.69, while the S&P 500 slipped 0.72% to 4,667.45 and the Nasdaq Composite, meanwhile, slid 269.62 points or 1.71% to 15,517.37, marking its worst daily decline since Dec. 3.
What’s driving the markets?
Investors were interpreting the consumer inflation data as not as bad as the worst-case-scenario for Wall Street.
Data released ahead of the stock market open on Wall Street showed November consumer price inflation rose 6.8% annually, slightly higher than expectations for a rise of 6.7% by a poll of economists by The Wall Street Journal. It marks the fastest annual inflation rate since 1982.
The cost of living rose 0.8% on the month, just ahead of expectations for a 0.7% gain. Core inflation, which strips out food and energy costs, jumped 0.5% in November as expected, while core inflation year-over-year in November rose 4.9%.
“The in-line year on year reading plus the slight move lower in the monthly read appears to have eased bets of a sooner rate rise by the Fed,” wrote Fiona Cincotta, senior financial markets analyst at City Index, in a market brief.
The analyst said that the market also may have “built itself up for a much higher reading.”
“The initial reaction has seen the US dollar fall and stocks rise with high growth tech stocks leading the charge; moves consistent with easing hawkish Fed expectations. However, the initial knee jerk reaction isn’t always the one that stays,” the City Index analyst cautioned.
The consumer inflation report now sets the stage for next week’s Federal Open Market Committee gathering, which has been telegraphing its plans to increase the pace of monetary policy tightening, at least inasmuch as tapering asset purchases is concerned.
The policy-setting FOMC will meet Dec. 14-15.
Also on tap for Friday will be the preliminary University of Michigan consumer sentiment index for December, along with the Federal budget for November.
Thursday’s losses for stocks followed a three-session win streak for all three major indexes, as investors rushed to buy beaten-down stocks following the market slump on worries over the omicron variant of the coronavirus. Concerns over Chinese property companies as China Evergrande
3333,
was downgraded at Fitch also simmered in the background.
See also: Household wealth has surged an astonishing $36 trillion. What that means for markets.
What companies are in focus?
-
Shares of Oracle Corp.
ORCL,
+15.94%
climbed after the database giant reported forecast-beating fiscal second-quarter results. -
Broadcom
AVGO,
+9.47%
shares rose 6% after the chip and software company announced an aggressive plan to return shareholder cash following an earnings beat. -
Chewy
CHWY,
-8.45%
stock slid after the online retailer of pet food and other pet-related products reported fiscal third-quarter results late Thursday. -
Peleton Interactive Inc.
PTON,
-2.63%
shares fell after the maker of home-exercise equipment was cut to neutral from outperform at Credit Suisse, which slashed its price target to $50 from $112. Shares slid 11% on Thursday, amid publicity over a plot twist in the “Sex and the City” revival.
How are other assets trading?
-
The yield on the 10-year Treasury note
TMUBMUSD10Y,
1.464%
retreated 1.2 basis points to 1.47%, after pitching higher early Friday. Treasury yields and prices move in opposite directions. -
The ICE U.S. Dollar Index
DXY,
+0.03% ,
a measure of the currency against a half-dozen other monetary units, was little changed at 96.268. -
In oil futures, West Texas Intermediate crude
CL00,
+0.58%
for January delivery
CLFFX,
-1.06%
rose 29 cents, or 0.4% to $71.19 a barrel on the New York Mercantile Exchange. -
Gold futures
GC00,
+0.30%
for February delivery
GCG22,
+0.30%
rose 0.2% to $1,780.10 an ounce -
The Stoxx Europe 600 Index
SXXP,
-0.03%
was flat, along with London’s FTSE 100 Index
UKX,
-0.09% . -
In Asia, the Shanghai Composite Index
SHCOMP,
-0.18%
closed 0.1% lower, while the Hang Seng Index
HSI,
-1.07%
fell 1% in Hong Kong and China’s CSI 300
000300,
-0.46%
fell 0.4%. Japan’s Nikkei 225 Index
NIK,
-1.00%
closed down 1%.
