US Stocks Eye 5th Straight Green Session, Semiconductors Jump To Fresh All-Time Highs: The Markets Friday

U.S. stocks are set for a fifth consecutive session of gains, with the S&P 500 Index rising 2.7% this week, its strongest weekly performance since March and reaching its highest level since April 2022. Encouraging reports from major financial institutions including JPMorgan Chase & Co JPM and Wells Fargo Company WFC, indicate the sector has responded positively since the crisis in March.

In the semiconductor sector, the VanEck Semiconductor ETF SMH reached new all-time highs, surpassing previous records set in November 2021.

Investors welcomed an impressive University of Michigan consumer sentiment report for July, as the index surged 12% compared to the previous month, reaching its highest level since September 2021. This positive sentiment was driven by decreasing inflation and a resilient job market. Yet the survey also revealed an increase in both short-term and long-term consumer inflation expectations.

Chart Of The Week: S&P 500 Headed For Second-Best Week Of The Year

Cues From Friday's Trading:

The S&P 500 ticked 0.2% higher, while the Nasdaq 100 Index rose 0.6%. Blue-chip stocks in the Dow Jones Industrial Average rose 0.4%, while small caps in the Russell 2000 tumbled 1.2%.

Analyst Color:

Following this week’s dual inflation reports, Quincy Krosby, chief global strategist for LPL Financial, said the Fed could be prepared to deem a July 26 rate hike as a "one and done."

The Fed would still want to see a similar retrenchment in the core CPI inflation and therefore an interest rate hike on Sept. 20 remains a viable possibility, the analyst said. 

"The ‘insurance’ rate hike that may be needed by the more hawkish side of the FOMC may ultimately win out, but all market indicators are pointing to a Fed that is moving closer to the end game," Krosby said.

Friday’s Trading In Major US Equity ETFs: In midday trading on Friday, the SPDR S&P 500 ETF Trust SPY was 0.1% higher to $450.16, the SPDR Dow Jones Industrial Average ETF DIA rose 0.3% to $345.17 and the Invesco QQQ Trust QQQ was 0.6% higher to $381.23, according to Benzinga Pro data.

U.S. sectors showed mixed performance, with the Health Care Select Sector SPDR Fund XLV outperforming, up 1.5%, and the Energy Select Sector SPDR Fund XLE plummeting 2.3%.

The Technology Select Sector SPDR Fund XLK ticked 0.5% higher, and the Consumer Discretionary Select Sector SPDR Fund XLY rose 0.4%.

Latest Economic Data:

The preliminary reading of the University of Michigan’s consumer sentiment index for July rose from 64.4 to 72.6 in July, the highest since September 2021, marking a 12.7% increase on the month and a 41% surge from a year ago.

The year-ahead inflation expectations ticked higher from 3.3% to 3.4%, above the expected 3.3%. Long-run inflation expectations also moved slightly higher from 3% in June to 3.1% in July, in line with estimates.

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Stocks In Focus:

• State Street Corp. STT fell over 10%, on track for its worst trading session since March 2020, as the bank reported earnings only marginally higher than expected but missed revenue forecasts.
• United Health Group Inc. UNH jumped 8%, on track for its best session since November 2020, after the company reported better-than-expected earnings last quarter.
• Nokia Corp. NOK fell 9.4% on warnings of an extended demand slump in North America.
• Leslie's, Inc. LESL, a direct-to-consumer pool and spa care brand, plummeted over 30% following its preannouncement and CFO transition.
• Elanco Animal Health Inc. ELAN rose 11% after the U. S. Environmental Protection Agency (EPA) reviewed and confirmed the safety of its flea and tick collar branded as Seresto.

Commodities, Bonds, Other Global Equity Markets:

Crude oil fell 1.9%, with a barrel of WTI-grade crude trading at $75.60. The United States Oil Fund ETF USO was 1.9% lower to $67.80.  

Treasury yields rose, with the 10-year yield up by 5 basis points to 3.81% and the two-year yield up by 10 basis points to 4.74%. The iShares 20+ Year Treasury Bond ETF TLT was 0.6% lower for the day. 

The dollar ticked higher, with the U.S. dollar index, which is tracked by the Invesco DB USD Index Bullish Fund ETF UUP, up 0.1%. The EUR/USD pair, which is tracked by the Invesco CurrencyShares Euro Currency Trust FXE, was 0.1% lower to 1.1235.

European equity indexes closed slightly in the red. The SPDR DJ Euro STOXX 50 Etf  FEZ fell 0.1%. 

Gold fell 0.1% to $1,958/oz. The SPDR Gold Trust GLD was 0.1% lower to $182. Silver rose 0.5% to $24.9, with the iShares Silver Trust SLV up 0.4% to $22.80. Bitcoin BTC/USD was 0.9% lower to $31,204.

Staff writer Piero Cingari updated this report midday Friday. 

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