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US open: Stocks start slightly higher, Nasdaq set for best week since 2011
Wall Street kicked-off the Friday session in good form, with investors seemingly setting aside their concerns about rising inflation and higher interest rates and stocks on track to extend their win streak into a sixth day.
At 1515 GMT, the Dow Jones Industrial Average was up 0.15%, with the S&P 500 having moved up 0.08% as the Nasdaq gained 0.20%, with the latter flirting with its best week in over six years.
Connor Campbell, financial analyst over at SpreadEx, said, "The Dow looked pretty tired after the bell, at the very best nudging 0.2% higher. It must be said, however, that of late the index has tended to save most of its energy for later in the US session, meaning it may well open up before the day's close."
David Morrison, chief market analyst at GKFX, was a tad more cautious.
"All this suggests that investors have shrugged off the stock market correction from earlier in the month. However, it's worth noting that the futures indices have all pulled back from their best levels this morning and also that this week's bounce-back looks a bit overdone. So today's session takes on particular significance, especially ahead of the weekend. Another strong close will have many traders looking for US stock indices to retest January's record highs. However, if we get a pull-back which takes the S&P 500 back below 2,700 then get set for another bumpy week," Morrison told clients.
From a technical standpoint, Jose Maria Rodriguez, chief technical analyst at WebFG UK, pointed out that the S&P 500 was now at the 61.8% Fibonacci retracement of its recent downdraft.
In terms of probabilities, although it was impossible to know for certain, a re-test of the 200-day moving average was more likely than an extension of the recent rally in the S&P 500 back to its record highs, Rodriguez said.
He also noted the recent decline in trading volumes ahead of the 19 February holiday celebrating George Washington's birthday.
In the FX arena, the dollar was trying its best to soften losses seen all week, taking back 0.4% against the pound and 0.5% on the Euro.
In macro news, new-home construction rose to the highest level seen since October 2016 in January, as a surge in apartment building helped build momentum in the housing market, government figures showed on Friday.
The results were seen as a positive sign that homebuilding in the US would continue to advance after the best year seen in terms of new construction in the last decade. Demand was expected to be supported by continued hirings and heightened confidence required for consumers to make big purchases.
Separately, building permits soared to their highest level since 2007 as housing starts jumped 9.7% to an annual rate of 1.32m units, the Commerce Department said on Friday.
The general consensus amongst economists led to a forecast of housing starts rising at a pace of 1.23m units to kick the year off.
US consumer sentiment improved unexpectedly in February, hitting its second-highest level since 2004 as tax cuts and a recovering jobs market helped Americans shrug off stock-market volatility, according to a survey undertaken by the University of Michigan.
The rise in sentiment, which beat all forecasts, came as Americans were getting paid more as a result of Donald Trump's tax cuts announced in December.
The increase was also consistent with data on hiring and wages published by the Labour Department earlier in February that showed around 35% of respondents gave favourable references to government policies, the highest level in more than fifty years.
In corporate news, Campbell Soup had fallen back as much as 3.06% despite its second-quarter results returning an adjusted earnings per share of $1.00 versus estimates of $0.82, and Kraft Heinz suffered its worst decline in more than two years after revealing disappointing sales and profit results, fuelling sentiment that the firm required large-scale acquisition to drive growth.
Coca-Cola fizzed 0.71% higher at the open after its fourth-quarter numbers beat analysts' forecasts on both the top and bottom line.