US Stocks Reacts To Upbeat Economic Data, Dollar Rebounds As Yields Surge: What's Driving Markets Friday?

Wall Street extended its gains on Friday as better-than-anticipated economic data alleviated concerns of an impending economic slowdown.

The U.S. economy added 199,000 jobs in November 2023, up from the 150,000 added in October and exceeding market expectations of a 180,000 increase. The unemployment rate declined more than expected to 3.7%, the lowest since July.

The latest University of Michigan consumer sentiment report revealed a bigger-than-expected jump in December and a decrease in short- and long-term inflation expectations.

Investors recalibrated their bets Friday on rate cuts for 2024. They pushed back expectations for the start of Federal Reserve rate cuts from March to May 2024, now anticipating four cuts instead of five by December 2024, according to CME Group’s FedWatch tool.

By 1:30 p.m. in New York trading, major indices saw modest gains, while small caps in the Russell 2000 outperformed their large-cap counterparts.

Treasury yields rose significantly, with the policy-sensitive two-year yield up 13 basis points to 4.72% and the 10-year yield up 8 basis points to 4.24%. The U.S. Dollar Index (DXY), as tracked by the Invesco DB USD Index Bullish Fund ETF UUP, rebounded by 0.4%, while gold fell by over 1% in response.

Crude oil managed to rise by 1.6%, but it wasn’t enough to avoid ending its fifth consecutive week in the red, marking the longest losing streak in over five years.

Bitcoin BTC/USD gained 1%, poised to record its eighth straight week of gains, the longest streak since June 2017.

Friday Performance In Major US Indices, ETFs

The SPDR S&P 500 ETF Trust SPY was 0.2% higher to $458.40, the SPDR Dow Jones Industrial Average ETF DIA rose 0.2% to $362.48 and the Invesco QQQ Trust QQQ was 0.3% higher to $391.31, according to Benzinga Pro data.

Sector-wise, energy took the lead, with the Energy Select Sector SPDR Fund XLE up 0.7%. Real estate was the laggard, with the Real Estate Select Sector SPDR Fund XLRE down 0.9%.

Among industries, energy producers, as tracked by the SPDR Oil & Gas Explor. & Product. XOP, rebounded, up 0.8%, while gold miners, as monitored through the VanEck Gold Miners GDX, fell the most, down 2.8%.

Chart Of The Day: US Consumer Confidence Jumps In December

Stocks In Focus

• Paramount Global Inc.PARA saw a significant 14% rally on Friday, prompted by reports indicating that David Ellison, the CEO of the diversified media firm Skydance, and the investment group RedBird Capital are exploring the possibility of a takeover.
• Warner Bros Discovery Inc. WBD also rose over 6% in reaction to the news.
• Lululemon Athletica Inc. LULU rose over 5% to fresh record highs, after the company reported quarterly results that exceeded expectations.
• HashiCorp Inc. HCP tumbled 18% following the disclosure of CEO and chair David McJannet‘s sale of 200,000 shares of the company.
• RH RH fell 13% in reaction to disappointing quarterly results.
• Copper miners Freeport-McMoRan Inc. FCX and Southern Copper Corp. SCCO rose over 5% amid speculation of improving fiscal stimulus in China.
• Applied UV Inc. AUVI witnessed a 20% drop as the company announced its intention to carry out a 1-for-25 reverse stock split of its common shares.
• MBIA Inc. MBI rose by 77% on Friday, leading among Russell 2000 stocks. This sharp increase follows the company’s announcement of a significant $8 per share cash dividend, amounting to approximately $409 million for its shareholders.

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