“US Markets Rally on Strong Economic Data and Tech Earnings Beat Expectations”

Not since January have the S&P 500 and the Dow Jones indices risen as strongly as on Thursday, where the Nasdaq Composite also topped the two with a rise of 2.6 per cent.

Trading in futures contracts on Friday, on the other hand, pointed to a slight fall back on the eve of the week. The prediction hit in the minutes after the stock market opened, but then the trend reversed at 4:00 p.m.:

• The S&P 500 rises 0.4 percent
• The Dow Jones Industrial Average rose 0.4 percent
• The Nasdaq Composite rises 0.3 percent

New inflation figures

One hour before the market opened, fresh inflation figures came from the US: Total inflation ended at 4.2 per cent in March, 0.1 per cent higher than expected, while core inflation came in exactly as expected: at 4.6 per cent, unchanged from February.

Both parts measured by the PCE deflator, which adjusts for changes in personal consumption. This is also the US central bank’s preferred inflation indicator.

At the same time, the wage index for the first quarter in the US was also released – and it shows a growth of 1.2 per cent in the quarter, somewhat higher than investors and economists expected in advance.

– This means that the pressure on the Fed is kept high, stated Marius Gonsholt Hov, chief economist at Handelsbanken to DN.

Next week, the US central bank (Fed) will make a new interest rate decision, in what is a week packed with central bank decisions.

This week, on the other hand, has primarily been about company news, with quarterly reports from east and west, especially from Tuesday.

Beats expectations

Several of the largest tech companies have come out with reports that have far exceeded the expectations of analysts, who heading into the quarter season were at their most pessimistic since 2009 towards the sector.

Now, an overview from FactSet shows that 80 percent of the total of 261 S&P 500 companies that have so far delivered quarterly figures have beaten expectations.

This also applies to Amazon, which came out with its quarterly report right after the stock market closed on Thursday. The share jumped in after-market trading – but will be punished when the actual trading opens on Friday. The share falls 1.1 percent after growth in sales from Amazon Cloud Services weakened in the quarter.

However, the Snap share falls just as hard as the after-trade on Thursday would suggest – in a few minutes the share price has been sent down 18.4 per cent. On Thursday evening, the company came out with quarterly figures, and it revealed a loss before tax that was significantly larger than expected.

Intel also released quarterly figures on Thursday evening – and despite the fact that the drop in income in the previous quarter was the largest in the company’s history, the share rose eight per cent on Friday.

CNBC points out that the company beat analyst estimates for both top and bottom lines. (Terms)Copyright Dagens Næringsliv AS and/or our suppliers. We would like you to share our cases using links, which lead directly to our pages. Copying or other forms of use of all or part of the content may only take place with written permission or as permitted by law. For further terms see here.