US equity futures rose, suggesting indices would climb at the end of a choppy week, as investors analyzed another batch of large corporate earnings.
Futures for the S&P 500 edged up 0.4% on Friday. The broad stock indicator rose 1.7% on Thursday, its strongest one-day gain since March, after better-than-expected results and labor market data helped allay concerns about the economic outlook .
Ahead of the bell in New York, Goldman Sachs Group shares rose 1.5%. The bank was due to report earnings before the stock market opened, following strong results from its competitors earlier in the week.
In other corporate news, JB Hunt Transport Services reported a third quarter profit increase, raising shares 3.8% pre-market. Alcoa shares rose 6.6% after the metals producer posted higher third-quarter sales on Thursday, boosted by rising aluminum prices.
Moderna rose 3.2% after experts advising the Food and Drug Administration voted Thursday night to recommend authorization of a booster of the company’s Covid-19 vaccine. Virgin Galactic’s U.S.-listed shares fell more than 18% after founder Richard Branson said the company was delaying the launch of private astronaut flights until the end of next year.
After a rough patch for stocks, strong earnings from healthcare companies and banks including Morgan Stanley and Citigroup have supported the market in recent days. Investors remain concerned that supply chain bottlenecks and sharply rising energy prices are fueling inflation, which could prompt central banks to withdraw stimulus sooner than expected.
The fund managers will analyze the quarterly reports before the market opens. Of the 35 S&P 500 companies that had posted earnings until Thursday, 80% had beaten analysts’ forecasts, according to FactSet, slightly better than three-quarters who did so each quarter in 2019, before the pandemic.
At 10 a.m., the University of Michigan survey on consumer confidence will give new clues to the spending outlook.
Energy markets extended a surge on Friday that pushed oil and gas prices to multi-year highs and strained already blasted supply chains. Futures on Brent, the benchmark in global oil markets, rose 1% to $ 84.85 a barrel, after hitting their highest intraday level in three years.
In the bond market, 10-year Treasury yields climbed to 1.545% on Friday, from 1.519% on Thursday. Yields rise when bond prices fall.
Friday’s rise in yields was in line with bullish movements in equities and commodities, although correlations between different markets are fluctuating as investors debate the outlook for inflation, according to Richard McGuire, head of rate strategy at Rabobank.
“We’ve seen ebb and flow this week,” he said. Mr. McGuire expects the explosion in inflation to fade, as “high prices will sow the seeds of their own downfall” as consumers begin to spend less.
Overseas markets were generally higher. The Stoxx Europe 600 rose 0.4%, led by stocks from energy producers and travel and leisure companies, all sensitive to the trajectory of economic growth. Shares of airlines, including Ryanair and Wizz Air, rose after the UK government said travelers returning to England from most countries could undergo rapid-fire coronavirus tests from the end of the month. Currently, the rules require a more expensive test.
In Asia, Japan’s Nikkei 225 gained 1.8%, Hong Kong’s Hang Seng rose 1.5%, and China’s Shanghai Composite Index edged up 0.4%.
The Japanese yen continued to fall. Traders sold the currency over fears that high oil and gas prices could hurt economic growth in Japan, a major energy importer. The yen fell 0.6% to trade at 114.33 per dollar, bringing its losses for the week to 1.8%.
The Turkish lira fell 0.4% to trade at 9.22 per dollar. President Recep Tayyip Erdogan fired three senior central bank officials this week, adding to the pressure on the currency, which has fallen nearly 20% this year. The central bank cut its key rate in September, even as the annual rate of inflation hit nearly 20%, prompting investor concerns that prices would continue to rise at a rapid pace.
Write to Joe Wallace at [email protected]
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