Stocks increased on Friday after strong earnings from big tech companies such as Alphabet and Intel while the U.S. The S&P 500 gained 0.6% as the Nasdaq Composite climbed 1%. Both indexes reached all-time highs around midday Friday. The Dow Jones Industrial Average traded 27 points higher. The major indexes briefly pared benefits after National Economic Council Director Larry Kudlow informed CNBC’s “Squawk on the Street ” he’d not expect a “grand offer ” to come out of next week’s U.S.-China trade talks.
For the week, the S&P 500 and Nasdaq were headed for solid gains. The two indexes were up 1.6% and 2.2% week to time, respectively. The Dow is up 0.1% this week. 25 billion talk about repurchase program. Twitter stocks gained more than 8% on the back of second-quarter results that topped estimates.
The social press company also reported a 14% rise in monetizable daily active users. Consumer stocks such as Starbucks and McDonald’s also contributed to the gains. Starbucks gained 7.1% after reporting same store-sales growth for the previous quarter that smashed quotes. McDonald’s climbed 0.5% as promotions led better-than-expected U.S. More than 40% of S&P 500 companies have reported quarterly profits for the second quarter.
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Of those companies, 76.4% have submitted a stronger-than-forecast income, according to FactSet. The U.S. overall economy expanded by 2.1% in the second quarter, friday the Commerce Department said. The broadest way of measuring the U.S. 1.8%, regarding to economists surveyed in CNBC/Moody’s Analytics Rapid Update. Growth was driven by a 4.3% increase in consumer expenditures, which offset a 5.5% slump in business investment. “The government and consumer spending drove all of the gain in GDP as trade, inventories and investment reversed the Q1 gains,” Peter Boockvar, chief investment official at Bleakley Advisory Group, said in a note.
The data release comes as traders await a potential rate cut from the Federal Reserve next week. Market goals for a 25 basis-point rate slice were at 78.6% on Friday morning, based on the CME Group’s FedWatch tool. “The market owes its power in large part to the Fed eases priced in. And the Fed has mentioned the slowdown running a business resulting from the generally slower global economy,” said Steve Blitz, main U.S. Fed has no option apart from to cut 25 on Wednesday and see if the data unfold to generate the necessity for an additional cut in September.
Indeed, week and barring an urgent amaze all eyes will be on the Given next, a 25 basis point rate slice will be delivered on Wednesday. This morning’s strong GDP report won’t change the Fed’s mind. Well, since the rate lower had been cooked into equities, I expect a mild selloff to occur but CTAs and quant hedge money will be buying any dip as their models are bullish on stocks and shares.
What is astounding, however, is that equities bounced back strongly after the bad Santa selloff of 2018 plus they haven’t really let up in any way. And the Fed is cutting rates because inflation anticipations remain low stubbornly! If the dips continue being bought and we get more record highs on the S&P 500, Dow and Nasdaq Jones, I suspect people will be worried about a good old fashion summer currency markets melt-up.