[BRIEFING.COM] U.S. equities have risen to new all-time highs today, looking for their eighth win in nine sessions.
The Dow Jones Industrial Average has jumped 0.7% to 25759.40, the S&P 500 has climbed 0.5% to 2781.45, and the Nasdaq Composite has advanced 0.5% to 7249.90. Small caps trade roughly in line with the broader market with the Russell 2000 up 0.5% at 1595.28. All four indices have hit new intraday records and currently hover near their best marks of the day.
Financials kicked off the fourth quarter earnings season this morning on a mostly higher note. JPMorgan Chase (JPM 111.83, +0.99) and Wells Fargo (WFC 62.94, -0.07) were the headliners with PNC (PNC 151.01, -0.48) and BlackRock (BLK 554.48, +16.56) playing the opening act:
- JPMorgan Chase is up 0.9% after reporting better-than-expected earnings and lower-than-expected revenue
- Wells Fargo is down 0.3% after reporting above-consensus earnings and below-consensus revenue
- PNC is down 0.4% after beating both earnings and revenue estimates
- BlackRock is up 3.1% after beating both earnings and revenue estimates
The S&P 500's financial sector is higher by 0.6%, which places it in the middle of the sector standings. The consumer discretionary (+0.8%), industrials (+0.7%), energy (+0.7%), and health care (+0.7%) sectors are the strongest groups while consumer staples (-0.1%), utilities (-0.2%), and real estate (-0.8%) are the weakest.
Within the consumer discretionary space, retailers have had a solid showing, advancing for the third session in a row, after the Retail Sales report for December showed a month-over-month increase of 0.4%, as expected, and the National Retail Federation reported that holiday sales increased 5.5% in 2017. The SPDR S&P Retail ETF (XRT 47.73, +0.45) is up 1.0%, which extends its week-to-date gain to 3.5% and its year-to-date gain to 5.7%.
On a related note, Nordstrom (JWN 51.66, +1.57) is up 3.2% following a CNBC report that the Nordstrom family is considering resuming efforts to take the company private.
The top-weighted technology sector (+0.5%) is trading roughly in line with the broader market, but Facebook (FB 181.22, -6.57) has weighed heavily on the group, dropping 3.5%, after making changes to its news feed, which have prompted concerns that users will spend less time on the site.
In the bond market, U.S. Treasuries are under pressure, sending yields higher across the curve; the yield on the benchmark 10-yr Treasury note is up three basis points at 2.56%. Losses were extended following the release of the core Consumer Price Index for December, which came in hotter than expected (+0.3% actual vs +0.2% Briefing.com consensus).
Elsewhere, the Euro Stoxx 50 (+0.4%) broke a two-session losing streak after German Chancellor Angela Merkel's CDU/CSU agreed to a blueprint for a grand coalition with its former coalition partner SPD. To be clear, an agreement has not been finalized, but the situation finally looks promising after months of uncertainty.
The euro has climbed to a three-year high against the U.S. dollar following the news, jumping 0.8% to 1.2132.
In Asia, stocks ended Friday mostly higher with Hong Kong's Hang Seng (+0.9%) and China's Shanghai Composite (+0.1%) extending their winning streaks to 14 and 11 sessions, respectively.
Reviewing Friday's economic data, which included the Consumer Price Index for December, Retail Sales for December, and Business Inventories for November:
- Total CPI increased 0.1% (Briefing.com consensus +0.2%) in December while core CPI, which excludes food and energy, rose 0.3% (Briefing.com consensus +0.2%). On a year-over-year basis, total CPI is up 2.1% (from 2.2% in November) and core CPI is up 1.8% (from 1.7% in November).
- The key takeaway from the report is that it won't change the Fed's prevailing expectation that three rate hikes are in order this year. That could be serving as a disruptive thought for traders who were likely inclined after yesterday's weaker than expected PPI report to think the Fed might think three rate hikes could be too many.
- December retail sales increased 0.4% (Briefing.com consensus +0.4%). The prior month's increase was revised to 0.9% from 0.8%. Excluding autos, retail sales increased 0.4% in December while the Briefing.com consensus expected an increase of 0.4%. The prior month's increase was revised to 1.3% from 1.0%.
- The key takeaway from the report is that it should underpin the belief that favorable economic drivers continue to act as an expedient for increased consumer spending activity that will benefit Q4 GDP growth.
- Business Inventories increased 0.4% in November (Briefing.com consensus +0.3%). The October reading was revised to 0.0% from -0.1%.
- The key takeaway from the report is that sales growth is outpacing inventory growth, which is a step toward regaining some pricing power.