Wall Street has been buoyed by a strong earnings season.
After stocks rose to record highs on the previous day, US futures traded mixed on Friday.
Despite inflation soaring, Equities have remained remarkably strong with economic data lifting investors’ spirits.
Despite a breakneck rally, cryptocurrencies have fallen in recent days.
US stock futures were mixed Friday after the S&P 500 and Nasdaq hit record highs the previous day, as investors became more optimistic about the economic outlook.
Bitcoin fell for the fifth consecutive day. It traded at $56,878, a lot lower than the record high of $68,000 reached just over a week ago.
S&P 500 futures were down 0.1%, and Dow Jones futures slipped 0.33%, signaling a downbeat start to trading later in the day. Meanwhile, Nasdaq 100 Futures were 0.3% higher.
The S&P 500 and the Nasdaq both finished at new highs Thursday, as corporate earnings continued to impress investors and a fall in weekly jobless claims cooled fears about the US economy.
Overnight, China’s CSI 300 closed 1.08% better, while Japan’s Nikkei 225 climbed 0.5%. Europe’s Stoxx 600 fell 0.1% in the early morning Friday. COVID-19 cases are on the rise in Europe. Austria announced Friday that it will put itself under lockdown Monday and require vaccinations.
Despite concerns from investors about inflation and the possibility of central banks cutting back their support for economies, global stocks remain buoyant. This is partly due to the fact that bond yields have remained low, making it more attractive for investors.
The US stocks have been supported by earnings season. Nvidia’s stock rose 8.25% Thursday after posting record revenue. Macy’s stock and Kohl’s stock soared after strong earnings were reported by department store chains.
The latest sign that the economy is on the right track is the fall in new US jobless claims to 268,000, according to data Thursday.
Edward Moya, senior market analyst at Oanda’s trading platform, stated that the US economy looks good despite weekly jobless claims showing that the labor market recovery continues.
Investors will be watching Washington closely, as the House is expected later Friday to pass President Joe Biden’s “Build Back Better” bill. The bill details plans to spend $1.85 billion on education, healthcare, and the climate.
Also in focus is Biden’s choice for leader of the Federal Reserve — whether to keep Jerome Powell as Fed chair or to put Fed Governor Lael Brainard in his place. Biden indicated earlier this week that he could make the announcement by Friday.
Morgan Stanley predicts that 2022 will be the year of the stock picker as index gains slow down. These 27 stocks are high-quality growth stocks and they’re most bullish for the New Year.
Friday’s slide in cryptocurrencies was continued with bitcoin falling 4.4% to $56,878 via Bitstamp. The world’s largest cryptocurrency has dropped around 17% from November 10, when it reached a record high of $68,600.
Analysts have offered many reasons for its sharp fall, including the new crypto tax rules contained in Biden’s $1 trillion infrastructure bill and a recent warning by Beijing about crypto mining. Some analysts believe that the fall is a natural reaction to the token’s recent rise.
Other digital currencies — such as ether, binance coin, and solana — have fallen sharply in recent days, but were paring those losses on Friday.
Oil prices fell due to concerns about economic recovery in Europe and traders weighing the possibility of countries releasing strategic reserves to counter rising inflation. Brent crude fell 1.83% at $79.77 a bar, while WTI crude fell 1.7% to $77.12 a bar.
Bond yields fell, with the yield on the US Treasury note 10-year down 2.9 basis point to 1.558%. Prices are inversely related to yields.