Stock futures stumble after in-line inflation print
U.S. stocks faltered at the open on Friday, with some signs that indexes could end the week on a positive note as technology stocks headed for modest gains.
The S&P 500 (^GSPC) rose 0.2%, while the Dow Jones Industrial Average (^DJI) was little changed. The tech-heavy Nasdaq Composite (^IXIC) rose about 0.4%.
The yield on the benchmark 10-year US Treasury bond rose to 3.437% from 3.397% on Thursday. The dollar index rose 0.1% to trade at $101.94 on Friday morning.
Stocks extended a streak of losses Thursday as investors dissected economic data and corporate earnings reports, clouding their view of the health of the U.S. economy.
Despite concerns about the economy, markets have been quite resilient and mostly moved higher this year, according to the US Market Intelligence team at JP Morgan. However, the team does not believe that a recession is currently priced into the equity markets.
“We do not agree with the argument that because a recession is consensus,”[ads1]; the team wrote, “the market and economic performance must improve.”
The S&P 500 is expected to report a year-over-year earnings decline of 3.9% for the fourth quarter, according to data from FactSet Research. This would mark the first year-over-year decline in earnings reported by the index since 2020 if realized.
Wall Street navigated another round of data and Fedspeak on Thursday. Federal Reserve Bank of New York President John Williams said Thursday that the central bank has several rate hikes ahead “to bring inflation down to our 2% target on a sustained basis.”
Federal Reserve Deputy Chairman Lael Brainard and Federal Reserve Bank of Boston President Susan Collins expressed similar comments Thursday ahead of the Fed’s next monetary policy meeting, which starts on January 31.
Philadelphia Fed President Patrick Harker on Friday morning reiterated his view of shifting to 25 basis point rate hikes.
In corporate news, Netflix ( NFLX ) CEO Reed Hastings announced Thursday that he is stepping down. After a two-decade run, he leaves the streaming platform in the hands of co-CEO Ted Sarandos and COO Greg Peters after reporting a strong finish in 2022.
And the era of password sharing is almost over. The streaming giant will enforce password-sharing rules “more widely” by the end of the first quarter of 2023, Netflix announced in its earnings report on Thursday. Shares rose nearly 6% Friday morning.
Google parent Alphabet Inc. (GOOG, GOOGL) said it is laying off 12,000 workers, or more than 6% of its global workforce, becoming the latest tech company to trim staff after rapid expansion during the pandemic. Google parent Alphabet Inc. shares rose 3% at the open.
In the commodity market, oil prices rose. Brent crude, the global benchmark, rose nearly 0.6% to $86.64 a barrel, and WTI, the U.S. benchmark, added 0.5% to around $80.72. Both could end the week with another rally, fueled by optimism about rising demand in China.
Meanwhile, in the crypto market, Genesis Global Capital filed for bankruptcy protection late Thursday in the US Bankruptcy Court for the Southern District of New York. The move comes after the company was unable to raise money for its troubled lending unit and cut 30% of staff in a new round of layoffs in early January.
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Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter @daniromerotv
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