U.S. Stocks May Move In Opposite Directions In Early Trading

After turning higher over the course of the previous session, stocks may move in opposite directions in early trading on Friday. The major index futures are currently pointing to a mixed open for the markets, with the Dow futures up by 166 points but the Nasdaq futures down by 21 points.

Stocks closely linked to the economy reopening, such as airlines and cruise operators, may extend yesterday’s advance after President Joe Biden doubled his goal for the administration of coronavirus vaccines in his first 100 days in office.

Early strength is also likely to be seen among banking stocks after the Federal Reserve announced restrictions on bank holding company dividends and share repurchases will end for most firms after June 30th.

The Fed said firms with capital levels above those required by the current round of stress tests will no longer be subject to the additional restrictions.

“The banking system continues to be a source of strength and returning to our normal framework after this year’s stress test will preserve that strength,” said Fed Vice Chair for Supervision Randal K. Quarles.

On the other hand, a rebound by treasury yields may weigh on high-growth technology stocks, leading to an initial drop by the tech-heavy Nasdaq.

The yield on the benchmark ten-year note has moved notably higher after trending lower earlier this week but remains well off last week’s fourteen-month highs.

In U.S. economic news, the Commerce Department released a report showing personal income pulled back sharply in the month of February.

The Commerce Department said personal income plunged by 7.1 percent in February after skyrocketing by an upwardly revised 10.1 percent in January.

Economists had expected personal income to plummet by 7.3 percent compared to the 10.0 percent spike originally reported for the previous month.

The sharp pullback in personal income primarily reflected a decrease in government social benefits following the distribution of $600 stimulus checks in January.

The report also showed personal spending slumped by 1.0 percent in February after soaring by an upwardly revised 3.4 percent in January.

Economists had expected personal spending to decrease by 0.7 percent compared to the 2.4 percent jump originally reported for the previous month.

Meanwhile, a reading on inflation said to be preferred by the Federal Reserve showed the annual rate of core consumer price growth slowed to 1.4 percent in February from 1.5 percent in January.

Shortly after the start of trading, the University of Michigan is scheduled to release its revised reading on consumer sentiment in the month of March. The consumer sentiment index is expected to be upwardly revised to 83.6 from 83.0.

After coming under pressure early in the session, stocks showed a significant turnaround over the course of the trading day on Thursday. The major averages all bounced well off their lows of the session and into positive territory.

The tech-heavy Nasdaq showed a substantial recovery, ending the day up 15.79 points or 0.1 percent at 12,977.68 after tumbling by as much as 1.4 percent. The Dow also climbed 199.42 points or 0.6 percent to 32,619.48 and the S&P 500 rose 20.38 points or 0.5 percent to 3,909.52.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan’s Nikkei 225 Index and China’s Shanghai Composite Index both surged up by 1.6 percent.

The major European markets have also moved to the upside on the day. While the French CAC 40 Index has risen by 0.4 percent, the U.K.’s FTSE 100 Index and the German DAX Index are both up by 0.7 percent.

In commodities trading, crude oil futures are jumping $1.38 to $59.94 a barrel after plunging $2.62 to $58.56 a barrel on Thursday. Meanwhile, after falling $8.10 to $1,725.10 an ounce in the previous session, gold futures are edging down $0.50 to $1,724.60 an ounce.

On the currency front, the U.S. dollar is trading at 109.77 yen versus the 109.19 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1774 compared to yesterday’s $1.1764.