The primary American financial indicators suggest a possible slight decrease in the market at Friday's opening, coming after a continuous upward trend during the previous sessions.
Intel's stock, which experienced a significant 9.8% decrease in pre-market trading, may negatively affect market performance. This slump came after the company posted optimistic fourth-quarter results, but coupled them with disappointing first-quarter projections.
Visa, the payment processor company, might also face a downturn after announcing satisfying fiscal first-quarter profits but forecasting a slow-down in revenue growth for the current quarter.
In contrast, American Express's shares may gain some strength initially, as the company's impressive 2024 forecasts supplement their and below-estimate fourth-quarter results.
Despite a report from the Commerce Department that showcased a more considerable than forecasted decrease in the yearly core consumer price growth rate in December, the futures remained negative.
The Commerce Department reported a 2.6% increase in December prices compared to the previous year, which mirrored November's figures and aligns with economists' predictions.
The study also noted that the annual growth rate of core consumer costs, excluding food and energy prices, slowed from 3.2% in November to 2.9% in December, slightly below the anticipated 3.0% decrease.
The Commerce Department's monthly report on personal income and spending included these annual inflation data, the preferred metric of the Federal Reserve.
Although stocks slightly retreated after initially advancing, they rallied towards the day's end on Thursday, closing mostly higher. Both the Dow and the S&P 500 achieved new record high closures, while the Nasdaq saw its best closing figures in over two years.
Wall Street's early gains followed the release of a report from the Commerce Department indicating that US economic growth was above expectations and consumer price growth had slowed in the fourth quarter of 2023.
The report highlighted a 3.3% GDP increase in the fourth quarter after a 4.9% rise in Q3, in contrast to perceived expectations of a 2.0% surge.
The robust GDP growth is partly a result of consumer spending, which climbed 2.8% in Q4 after a 3.1% increase in Q3.
Regarding the inflation indicators, the Commerce Department noted a 1.7% increase in the personal consumption expenditures (PCE) price index in Q4, down from a 2.6% increase in Q3. When food and energy prices are excluded, the PCE price index rose 2.0% in Q4, mirroring Q3's figures.
The Commerce Department also released a report recording a static figure in the new orders for American manufactured durable goods in December.
This report followed a noticeably upwardly revised 5.5% surge in November. The forecast had predicted a 1.1% increase in durable goods orders, contrasting to the considerable 5.4% jump reported in the previous month.
However, if transportation equipment orders are excluded, there was a 0.6% increase in durable goods orders in December, following a 0.5% increase in November. Excluding transportation orders, it was predicted to rise by 0.2%.
A separate Labor Department report revealed a more substantial than expected rebound in initial unemployment claims for the week ending on January 20th. These initial unemployed claims increased by 25,000, reaching 214,000 from the previous week's revised 189,000 figure.
Investors' enthusiasm slightly waned towards the session's end, as they now look forward to a highly anticipated report on personal income and spending due this Friday.
Reports on personal income and spending, which include Federal Reserve's preferred readings on inflation, can significantly influence forecasts for interest rates.
On the stock market, technology giant IBM Corp. (IBM) saw a significant gain of 9.5 percent after reporting that its fourth-quarter performance exceeded analysts' estimates in terms of both revenue and profits.
Airline stocks also performed well during the day's trading, with the NYSE Arca Airline Index increasing by 3.4 percent. A notable uptick in the price of crude oil resulted in a strong performance by oil stocks, exemplified by a 2.3 percent increase in the NYSE Arca Oil Index.
After a steep drop on Wednesday, telecom stocks regained strength. The NYSE Arca North American Telecom Index increased by 1.8 percent. Interest-rate-sensitive sectors such as housing and utilities also saw notable gains, with positive performances also observed in gold, natural gas, and commercial real estate stocks.
Commodity and Currency Markets
Crude oil futures are declining, down $0.81 to $76.55 a barrel after surging $2.27 to $77.36 a barrel on Thursday. Gold futures, on the other hand, are inching up by $3.30 to $2,021.10 an ounce, after a small increase of $1.80 to $2,017.80 an ounce in the previous session.
In foreign exchange, the U.S. dollar is trading at 147.72 yen, compared to 147.66 yen at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.0870, up from yesterday's $1.0846.
Asia
Asian equity markets closed mixed on Friday. Initially, markets responded positively to China's unexpected announcement of a 50-basis point cut in the reserve requirement for banks. However, speculation about a monetary policy adjustment by the Bank of Japan led to a dampened sentiment in the Nikkei.
China's Shanghai Composite Index finished trading with a 0.1 percent gain at 2,910.22. In contrast, the Shenzhen Component Index dropped 1.1 percent to end at 8,771.44.
The Japanese benchmark, the Nikkei 225 Index, fell 1.3 percent to close at 35,751.07. Stocks in Pacific Metals, Rakuten, Nippon Sheet Glass, JGC Corp., and Panasonic Corp. all saw substantial gains. Conversely, Advantest Corp, SUMCO Corp., Tokyo Electric Power Co., Dainippon Screen Manufacturing, and Kawasaki Kisen Kaisha experienced significant declines.
The Hang Seng Index of the Hong Kong Stock Exchange finished 1.6 percent lower, closing at 15,952.23. The Korean Stock Exchange's Kospi Index closed up 0.3 percent at 2,478.56. The New Zealand Stock Exchange's NZX 50 edged down 0.1 percent to close at 11,875.03.
Europe
European markets saw strong gains on Friday, particularly in France, driven by consumer confidence data and indications of easing inflation in the eurozone. The French CAC 40 Index surged by 2.2 percent, the U.K.'s FTSE 100 Index rose by 1.5 percent, while the German DAX Index increased by 0.1 percent.
Robust fourth-quarter sales from luxury goods group LVMH and positive performances from the banking sector contributed significantly to this upward momentum.
In the U.K., stocks such as Croda International, Diageo, St. James's Place, and Burberry Group saw significant gains. Meanwhile, J Sainsbury, Tesco, and BAE Systems saw declines.
Sartorius is experiencing a substantial surge in Germany, with an increase of over 7 percent. Other companies, such as Merck and Porsche, are witnessing gains of approximately 5.5 percent and 3.1 percent respectively. A host of other companies, including Brenntag, Mercedes-Benz, Fresenius Medical Care, Puma, BASF, Covestro, Fresenius, and Siemens Healthineers are also seeing appreciable increases, ranging between 1.5 to 2.1 percent.
Regrettably, not all companies are riding this wave of growth. Bayer's stocks have fallen by 2 percent. Similarly, Deutsche Telekom, MTU Aero Engines, SAP and Infineon are experiencing declines between 0.8 to 1.4 percent.
In the French market, LVMH has seen an impressive rise of nearly 11 percent, reporting a 10 percent increase in fourth-quarter sales. Pernod Ricard and Kering are also experiencing significant growth, with gains of 7 percent and 4.7 percent respectively.
A number of other companies in France, including Hermes International, Alstom, Teleperformance, L'Oreal, Saint Gobain, TotalEnergies and Carrefour are seeing an increase in stock value, ranging between 1.5 to 3.3 percent.
Unfortunately, STMicroElectronics and Worldline have witnessed a decline, with losses of 2.8 percent and 2.7 percent respectively.
GfK's Consumer Climate Indicator dropped to -29.7 in February, a considerable decrease from the revised -25.4 witnessed in the previous month. This drop, lower than the market consensus of -24.5, is also the lowest recorded in 11 months.
IMPROVEMENT IN FRENCH CONSUMER CONFIDENCE
Data from INSEE reveals a slight increase in the Consumer Confidence indicator for France, rising to 91 in January as compared to the previous month's figure of 89. Market predictions had expected a figure of 90.
REDUCED INFLATION EXPECTATIONS IN EURO AREA
Expectations for inflation in the eurozone were lowered for this year and the next, due to several factors: falling oil prices, weaker economic activity, and lower-out turn of actual inflation figures. This information comes from the Survey of Professional Forecasters facilitated by the European Central Bank.
U.S ECONOMIC REPORTS
In the U.S, the Department of Commerce released its report showing that the annual U.S consumer price growth remained unchanged in December.
Regarding personal income and spending, the Commerce Department revealed that personal spending rose by 0.3 percent in December after a 0.4 percent climb in November. The same report projected further growth of personal spending by 0.7 percent in December.
The National Association of Realtors is expected to release its report on pending home sales in December soon, with predictions for a 1.5 percent increase as opposed to the unchanged figure seen in November.
STOCKS IN FOCUS
Shares of semiconductor equipment maker KLA Corp. have experienced significant pre-market weakness following the company's better than expected fiscal second quarter results. Unfortunately, the company's disappointing fiscal third quarter guidance may lead to further falls.
Conversely, Snap shares are likely to see an increase after Deutsche Bank upgraded the Snapchat parent's stock from Hold to Buy. Cryptocurrency exchange operator Coinbase may also see an increase in value following Oppenheimer's decision to upgrade the company's stock from Perform to Outperform.
