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(Bloomberg) — Stocks are ending the week on a positive note as latest economic data reinforced bets the Federal Reserve will cut rates in September.
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About 85% of the shares in the S&P 500 rose Friday as the index reclaimed its 5,600 mark after a slide in the previous session. Tech rebounded, though smaller firms continued to outperform megacaps. Banks got hit at the start of the US earnings season, with results from Wells Fargo & Co., JPMorgan Chase & Co. and Citigroup Inc. failing to fuel industry momentum.
Equity traders brushed off a weak reading on consumer sentiment to focus on prospects for rate cuts that could ultimately benefit Corporate America. Data also showed producer prices climbed slightly more than forecast — but categories used to calculate the Fed’s preferred inflation measure, the personal consumption expenditures price index, were not so bad.
We continue to expect the Fed to join the global rate-cutting cycle in September, with 50 basis points of easing this year,” said Mark Haefele at UBS Global Wealth Management.
The S&P 500 was set for its 10th weekly advance in 12 weeks. The Nasdaq 100 rose about 1%. The Dow Jones Industrial Average topped 40,000. Nvidia Corp. led gains in big tech. Tesla Inc. rallied a day after tumbling over 8%. The Federal Communications Commission is investigating a hack of AT&T Inc. customer data.
Treasury 10-year yields declined two basis points to 4.19%. The pound is trading near its strongest level in a year versus the dollar and the highest in almost two years against the euro.
“Bulls withstood a barrage of data this week,” said Mark Hackett at Nationwide. “Market momentum remains relentless. Several important hurdles have been cleared, making earnings the next likely market catalyst.”
One of the biggest questions about Thursday’s market rotation — which notably improved breadth — is whether or not it is a legitimate trend reversal of the last year and half — or yet another head fake, according to Dan Wantrobski at Janney Montgomery Scott.
“We will say at the outset that as far as the technicals are concerned, it cannot be confirmed that yesterday’s action was the beginning of a sustainable longer-term trend,” he noted. “However, from a trading perspective, we do believe we can continue to see further rotation over the near term, as charts still point to the potential for mean reversion.”
Corporate Highlights:
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Boeing Co. has notified some 737 Max customers in recent weeks that aircraft due for delivery in 2025 and 2026 face additional delays, another reminder that production of its cash-cow jetliner faces a long road to recovery.
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Amazon.com Inc.’s artificially intelligent shopping assistant, Rufus, is now available to all US customers following five months of testing with a subset of consumers.
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Deutsche Lufthansa AG cut its profit outlook for the full year and warned that breaking even at its namesake German unit will be “increasingly challenging” as it grapples with higher unit costs and falling ticket prices.
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Novo Nordisk A/S’s Ozempic was linked to lower rates of dementia and a range of other mental problems in a University of Oxford study that raises expectations about the diabetes drug’s potential ancillary benefits.
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Samsung Electronics Co.’s largest union is now calling on employees at one of the company’s most advanced AI memory chip plants to walk off the job, switching tactics after their campaign for higher pay showed signs of losing steam.
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Taiwan Semiconductor Manufacturing Co.’s $420 billion equity rally this year will get a valuation test next week when it reports earnings, with analysts expecting the chipmaker to raise full-year sales forecasts.
Some of the main moves in markets:
Stocks
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The S&P 500 rose 0.7% as of 12:10 p.m. New York time
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The Nasdaq 100 rose 0.7%
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The Dow Jones Industrial Average rose 0.7%
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The Stoxx Europe 600 rose 0.9%
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The MSCI World Index rose 0.7%
Currencies
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The Bloomberg Dollar Spot Index fell 0.3%
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The euro rose 0.3% to $1.0903
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The British pound rose 0.5% to $1.2986
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The Japanese yen rose 0.6% to 157.91 per dollar
Cryptocurrencies
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Bitcoin rose 0.9% to $58,081.13
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Ether rose 0.3% to $3,123.94
Bonds
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The yield on 10-year Treasuries declined two basis points to 4.19%
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Germany’s 10-year yield advanced three basis points to 2.50%
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Britain’s 10-year yield advanced three basis points to 4.11%
Commodities
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Cecile Gutscher.
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©2024 Bloomberg L.P.
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