Benzinga - by Shanthi Rexaline, Benzinga Editor.
U.S. stocks seem poised for a higher open on Friday, buoyed by optimism surrounding upcoming earnings reports as the tech reporting season kicks off next week. Encouragement is also drawn from Congress’s agreement on a bill to fund the federal government until early March. Additionally, the day’s trading direction may be influenced by a few Federal Reserve official speeches, a consumer sentiment reading, and regional bank earnings.
As sentiment takes a positive turn, the focus shifts to the S&P 500 Index, with anticipation of surpassing its previous all-time high of 4,796.56 set in early January 2022.
Cues From Thursday's Trading:
- Tech optimism fueled a market rebound on Thursday following positive fourth-quarter earnings from Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM). Further strength was added by Atlanta Fed President Raphael Bostic’s comments hinting at a potential rate cut in the third quarter.
- The major averages opened higher but followed divergent paths, with the Nasdaq Composite and S&P 500 maintaining gains throughout the session. The Dow Industrials initially stayed mostly in the red before moving into positive territory late in the afternoon, breaking a three-session losing streak.
- The Nasdaq 100 Index, consisting of the 100 largest non-financial tech stocks, closed Thursday’s session at a new record.
- Economic readings revealed a surprise drop in jobless claims for the week ended Jan. 13, a larger-than-expected contraction in Philadelphia region manufacturing activity, and a mixed housing starts report.
- S&P 500 rally leaders included IT, communication services, industrial, and IT services stocks, while defensive utility and real estate stocks ended the session lower.
| Index | Performance (+/-) | Value |
| Nasdaq Composite | +1.35% | 15,055.65 |
| S&P 500 Index | +0.88% | 4,780.94 |
| Dow Industrials | +0.54% | 37,468.61 |
| Russell 2000 | +0.55% | 1,923.65 |
Analyst Color:
Following Thursday’s strong economic data, Independent Advisor Alliance Chief Investment Officer Chris Zaccarelli said, “Given the underlying strength of the US economy, it's difficult to get too bearish at this point.
“There are plenty of headwinds and causes for concern – interest rates are high, equity valuations are elevated and geopolitical risks abound throughout the world – and yet the market typically climbs a wall of worry.”
The analyst sees the “pervasive pessimism and doubt about the stock market and economy” as a “contrarian signal.” He sees this as “one of the best reasons to push against the crowd and remain fully invested.”
Futures Performance On Friday
| Futures | Performance (+/-) |
| Nasdaq 100 | +0.78% |
| S&P 500 | +0.46% |
| Dow | +0.39% |
| R2K | +0.22% |
In premarket trading on Friday, the SPDR S&P 500 ETF Trust (NYSE:SPY) rose 0.49% to $432.25 and the Invesco QQQ ETF (NASDAQ:QQQ) gained 0.86% to $416.54, according to Benzinga Pro data.
Upcoming Economic Data:
Chicago Fed President Austan Goolsbee is due to make a TV appearance at 8:30 a.m. ET.
The University of Michigan’s preliminary consumer sentiment survey results are due at 10 a.m. ET. The consumer sentiment index based on the survey is expected at 70 in January, from 69.7 in December. The forward inflation expectations readings of the survey could also grab some attention.
The National Association of Realtors will release its existing home sales report for December, also at 10 a.m. ET. Economists, on average, expect existing home sales to come in at a seasonally adjusted annual rate of 3.82 million units, flat with last month.
Fed Vice Chair for Supervision Michael Barr is scheduled to speak at 1 p.m. ET, followed by San Francisco Fed President Mary Daly at 4:15 a.m. ET.
Stocks In Focus:
- J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT) rose over 4% in premarket trading in reaction to its quarterly results.
- Tech stocks ground higher, with Nvidia Corp. (NASDAQ:NVDA) getting a shot in the arm from Meta Platforms, Inc. (NASDAQ:META) CEO Mark Zuckerberg stating that the company would buy 350,000 H100 GPUs by the end of 2024 amid its AI drive. Peer Advanced Micros Devices, Inc. (NASDAQ:AMD) received another price target hike, this time by TD Cowen.
- iRobot Corporation (NASDAQ:IRBT) plunged over 37% on reports that the company’s impending acquisition by Amazon, Inc. (NASDAQ:AMZN) has been blocked by EU regulators.
- PPG Industries, Inc. (NYSE:PPG) slipped over 1%, also following the results announcement.
- Regional banks Comerica, Inc. (NYSE:CMA). Fifth Third Bancorp. (NASDAQ:FITB), Regions Financial Corp. (NYSE:RF), State Street Corp. (NYSE:STT), and oilfield services company SLB Limited (NYSE:SLB) and insurer Travelers Companies, Inc. (NYSE:TRV) are due to report ahead of the market opening.
Crude oil futures fell 0.03% to $73.93 in early European session on Friday following Thursday’s 2.03% climb.
The benchmark 10-year Treasury note fell 0.101 percentage points to 4.13% on Friday.
The sentiment in Asia was mixed, with the Japanese Nikkei 225 average rallying strongly, while the Chinese and Hong Kong markets pulled back. European stocks traded higher in late-morning trading. In the currency market, the U.S. dollar has slipped against major counterparts, except the pound and Swiss franc, amid renewed hopes of rate cuts.
Cryptocurrencies slipped Friday, with Bitcoin (CRYTO: BTC) down about 2.25% over the past 24 hours. Over the past seven days, the apex crypto has lost about 10%.
Read Next: AI Drives Tech Rebound, Oil Soars, Bitcoin Tumbles: What’s Driving Markets Thursday?
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