Banks retreat after green Wall Street numbers

(ABM FN-Dow Jones) U.S. stock markets ended higher Friday, but below the day’s highs and records that were in the making until shortly before the closing bell. The S&P 500 eventually rose 0.6 percent to 5,615.35, and the Dow Jones rose 0.6 percent to 40,000.90. Earlier in the day, the index was above 40,000. The Nasdaq also closed below its record high set earlier this week at 18,398.45. That was also a 0.6 percent gain.

The rebound came after a lower close on Thursday, when Wall Street investors sold technology stocks to lock in some profits after the Nasdaq and S&P 500 hit new records in the previous days.

The tech selloff on Thursday was fueled, among other things, by a positive inflation report from the U.S. Traders then moved to parts of the market that would benefit most from interest rate cuts from the Federal Reserve.

For example, the Russell 2000 rose 3.6 percent on Thursday. “This means that the rally in stocks is not going to stop, but rather expand, as we expected for the second half of this year,” said Simon Wiersma, chief investment officer at ING.

Thursday’s encouraging inflation data was followed up moderately on Friday, with U.S. producer prices rising slightly faster than expected in June. Producer prices rose 0.2 percent on the month. Economists had expected a 0.1 percent increase. Prices were unchanged a month ago.

On an annual basis, producer prices rose by 2.6 percent in June. A month earlier, the increase was 2.4 percent. Core prices were stable on a monthly basis in June, and decreased compared to May, from 3.3 percent to 3.1 percent.

According to Clarke Billen of Bellwether Wealth, the stronger-than-expected PPI numbers show that inflation is still happening and that the data can be volatile. However, he still expects the Fed to cut rates in September. The chance of a cut after the summer is now more than 90 percent.

U.S. consumer confidence in the economy fell slightly in July, while inflation expectations also fell, preliminary figures from the University of Michigan showed on Friday.

The consumer confidence index fell to 66.0 from 68.2 in June in mid-June. Inflation expectations for the next 12 months were 2.9 percent, compared with 3.0 percent at the end of June. Inflation expectations for the next five years also fell to 2.9 percent from 3.0 percent.

“Nearly half of consumers are still feeling the effects of rising prices, even though they expect inflation to remain low in the coming years, and with the upcoming election, consumers are still very uncertain about the economy,” says Joan Hsu.

The euro/dollar traded at 1.0909 late Friday, while US bond yields fell. Oil prices fell slightly and also lost ground on a weekly basis.

Company News

The US earnings season really got underway on Friday, with results from JPMorgan Chase, Citigroup and Wells Fargo. Citigroup beat expectations and JPMorgan did better than expected, but without a one-off gain, earnings fell. Wells Fargo disappointed with expectations. Citi lost 1.8 percent, JPMorgan fell 1.2 percent and Wells Fargo lost 6.0 percent.

Commenting on the results, JPMorgan CEO Jamie Dimon warned on Friday that the bank was focused on protecting against rising geopolitical risks and inflation. He also reiterated his view that interest rates could remain higher than some economists had expected.

Tesla shares rose 3.0 percent, as did other tech heavyweights Apple and Nvidia. Although UBS put Tesla on the sell list, its price target was raised to $197 from $147. Shares fell 8.4 percent on Thursday, snapping an 11-day winning streak. Bloomberg reported on Thursday that the electric car maker has postponed the launch of its robotaxi.

Nvidia shares, which fell 5.6 percent on Thursday, recovered 1.5 percent on Friday. Apple shares rose 1.3 percent.

AT&T shares fell 0.3 percent after the telecom company reported that customers’ phone calls and text messages were hacked in 2022 and 2023.

Update: To display correct closing prices.

Source: ABM Financial News

ABM Financial News is a resource for stock market news, video and data, both for trading platforms and real-time trading rooms and for online and offline media publications. The information contained in this article is not intended to constitute professional investment advice or a recommendation to make specific investments.