Friday June 11th

11-06-2021

The S&P 500 is set to add to a record as tech shares gain

U.S. stock index futures were slightly higher Friday morning after the S&P 500 hit a new record in the previous session despite hotter-than-expected inflation data. Futures tied to the Dow Jones Industrial Average gained 74 points while S&P 500 futures added 0.1%. Nasdaq-100 futures gained 0.1%. Apple, Amazon, Netflix, Microsoft and Alphabet all traded in the green. There were not many big movers in premarket trading. Some of the meme stocks were rebounding after a rough day on Thursday. AMC shares were up 3% and GameStop was up 7% in the premarket. Those two suffered double digit percent losses on Thursday as momentum in the Reddit favorites faded. On Thursday, the Dow Jones Industrial Average rose 19 points, or 0.06% to 34,466.24. The S&P 500 ended the day up 0.47% at 4,239.18, touching a new intraday high and posting a record close. The benchmark had traded sideways for about a month since hitting its last record on May 7. The Nasdaq Composite ended the day up 0.78% at 14,020.33. The gains came even as a report showed inflation rising at its fastest pace since 2008 as the economy rebounds from the pandemic-related recession. The Consumer Price Index represents a basket including food, energy, groceries and prices across a spectrum of goods, and jumped 5% in May from a year earlier. Markets shrugged off the news, however. Perhaps giving a boost to stocks has been the reaction in the bond market to the hot inflation reports. The 10-year Treasury yield fell to 1.44% on Friday, after trading above 1.77% earlier in the year. “A significant degree of this inflation may prove transitory as nearly half of the above-average spike in inflation comes from the base effects of last year’s weakened economy and even supply shortages should prove transitory as companies increase productivity and begin to meet pent-up demand,” Jason Pride, CIO of private wealth at Glenmede. Separately, initial jobless claims for the week ended June 5 came in at 376,000 — the lowest tally of the Covid pandemic — according to a separate report released Thursday. For the week, major benchmarks are mixed. The Dow is off by 0.8%, but the S&P 500 is up 0.2% and the Nasdaq Composite is up 1.5%. Shares in Asia-Pacific were mixed in Friday trade, with the BSE Sensex in India touching a record high. Stocks in Japan were little changed as the Nikkei 225 closed marginally lower at 28,948.73 while the Topix ended the trading day 0.14% lower at 1,954.02. Over in South Korea, the Kospi edged 0.77% higher on the day to 3,249.32. Mainland Chinese stocks closed lower as the Shanghai composite fell 0.58% to 3,589.75 while the Shenzhen component slipped 0.62% to 14,801.24. Hong Kong’s Hang Seng index advanced 0.33%, as of its final hour of trading. Oil prices rose on Friday to fresh multi-year highs and were set for their third weekly jump on expectations of a recovery in fuel demand in the United States, Europe and China as rising vaccination rates lead to an easing of pandemic curbs. Brent crude futures edged up 27 cents to $72.79 a barrel, a day after closing at their highest since May 2019. U.S. West Texas Intermediate (WTI) crude futures were up 43 cents to $70.75a barrel, a day after their highest close since October 2018. Gold prices edged lower on Friday as the dollar held steady with some investors betting on rising U.S. consumer prices being temporary. Spot gold was down 0.2% to $1,894.06 per ounce by 0913 GMT. U.S. gold futures rose 0.1% to $1,898.40.