Futures Pointing To Continued Strength On Wall Street

The major U.S. index futures are currently pointing to a higher open on Friday, with stocks likely to see further upside after rallying to new record highs in the previous session.

The markets may continue to benefit from yesterday’s strong U.S. economic data, with upbeat economic data from China adding to optimism about a global economic recovery.

A report from the National Bureau of Statistics showed the Chinese economy saw record growth in the first quarter, as GDP spiked 18.3 percent year-over-year.

On the U.S. economic front, the Commerce Department released a report showing a substantial rebound in new residential construction in the month of March.

The jump in housing starts may help alleviate some of the recent concerns about rising home prices due to a lack of inventory.

Upbeat earnings news may also generate buying interest, as Morgan Stanley (MS) joins other financial giants in reporting better than expected first quarter earnings.

Stocks moved sharply higher during trading on Thursday, more than offsetting the pullback seen on Wednesday. The Dow and the S&P 500 reached new record closing highs, while the Nasdaq ended the day at its best closing level in two months.

The major averages reached new highs in late-day trading before giving back some ground going into the close. The Dow jumped 305.10 points or 0.9 percent to 34,035.99, the Nasdaq soared 180.92 points or 1.3 percent to 14,038.76 and the S&P 500 surged up 45.76 points or 1.1 percent to 4,170.42.

The rally on Wall Street came following the release of a batch of largely upbeat U.S. economic data, including a Commerce Department report showing retail sales spiked by much more than expected in the month of March.

The Commerce Department said retail sales skyrocketed by 9.8 percent in March after tumbling by a revised 2.7 percent in February.

Economists had expected retail sales to surge up by 5.9 percent compared to the 3.0 percent slump originally reported for the previous month.

Excluding sales by motor vehicle and parts dealers, retail sales soared by 8.4 percent in March after plunging by a revised 2.5 percent in February. Ex-auto sales were expected to jump by 5.0 percent.

A separate report released by the Labor Department showed first-time claims for U.S. unemployment benefits pulled back by much more than anticipated in the week ended April 10th.

The Labor Department said initial jobless claims tumbled to 576,000, a decrease of 193,000 from the previous week’s revised level of 769,000.

Economists had expected jobless claims to decline to 700,000 from the 744,000 originally reported for the previous week.

With the much bigger than expected decrease, jobless claims fell to their lowest level since hitting 256,000 in the week ended March 14, 2020.

The National Association of Home Builders also released a report showing a modest increase in U.S. homebuilder confidence in the month of April.

The report said the NAHB/Wells Fargo Housing Market Index inched up to 83 in April after dipping to 82 in March, matching economist estimates.

The NAHB noted the uptick in homebuilder confidence came even as builders continued to grapple with rising lumber prices and supply chain issues and consumers faced higher home prices due to a lack inventory.

Meanwhile, the Federal Reserve released a report showing a rebound by industrial production in the month of March, although the increase fell short of expectations.

The Fed said industrial production jumped by 1.4 percent in March after plunging by a downwardly revised 2.6 percent in February.

However, economists had expected production to spike by 2.8 percent compared to the 2.2 percent slump originally reported for the previous month.

The Dow benefited from a significant advance by shares of UnitedHealth, with the managed care company jumping by 3.8 percent after reporting first quarter results that beat analyst estimates on both the top and bottom lines.

On the other hand, shares of Bank of America (BAC) came under pressure even though the financial giant reported better than expected first quarter results.

Gold stocks turned in some of the market’s best performances on the day, driving the NYSE Arca Gold Bugs Index up by 4.3 percent to its best closing level in over two months. The rally by gold stocks came amid a sharp increase by the price of the precious metal.

Significant strength was also visible among semiconductor stocks, as reflected by the 1.8 percent gain posted by the Philadelphia Semiconductor Index.

Advanced Micro Devices (AMD) and Nvidia (NVDA) posted standout gains on the day following positive comments from Raymond James.

Commercial real estate stocks also saw considerable strength on the day, with the Dow Jones U.S. Real Estate Index climbing by 1.8 percent to its best closing level in over a year.

Software, computer hardware, and biotechnology stocks also showed notable moves to the upside, while oil service stocks gave back ground after spiking on Wednesday.

Commodity, Currency Markets

Crude oil futures are inching up $0.06 to $63.52 a barrel after rising $0.31 to $63.46 a barrel on Thursday. Meanwhile, after soaring $30.50 to $1,766.80 an ounce in the previous session, gold futures are climbing $15.60 to $1,782.40 an ounce.

On the currency front, the U.S. dollar is trading at 108.85 yen versus the 108.76 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1980 compared to yesterday’s $1.1967.

Asia

Asian stocks rose broadly on Friday as strong U.S. and Chinese economic data cemented expectations of a solid global economic recovery.

The upside was limited amid the continuing surge in coronavirus cases in the region and possible restrictions on economic activity in several countries.

Chinese and Hong Kong shares rose as investors digested a raft of data. China’s Shanghai Composite Index climbed 27.63 points, or 0.8 percent, to 3,426.62, while Hong Kong’s Hang Seng Index ended up 176.57 points, or 0.6 percent, at 28,969.71.

China’s gross domestic product expanded 18.3 percent year-on-year in the first quarter of 2021, the National Bureau of Statistics said.

That was slightly shy of estimates for a jump of 19.0 percent but was up sharply from the 6.5 percent growth in the fourth quarter of 2020.

Industrial production was up an annual 14.1 percent in March, missing forecasts for a gain of 17.2 percent and slowing from the 35.1 percent growth in February.

Retail sales skyrocketed 34.2 percent year-on-year in the month, exceeding expectations for a gain of 28.0 percent and up from 33.8 percent in the previous month.

Fixed asset investment jumped an annual 25.8 percent, beating forecasts for 25.0 percent, while the jobless rate fell to 5.3 percent from 5.5 percent in February.

Japanese shares edged up slightly as investors awaited the outcome of a meeting between Prime Minister Yoshihide Suga and U.S. President Joe Biden set for the weekend.

The Nikkei 225 Index inched up 40.68 points, or 0.1 percent, to 29,683.37 as the country considers stricter Covid-19 measures for areas surrounding Tokyo. The broader Topix finished marginally higher at 1,960.87.

A top ruling party official suggested the possibility of canceling the Tokyo Olympics as the western metropolis of Osaka reported over 1,200 new infections Thursday, the highest since the pandemic began.

Chip-related shares gained ground after Apple supplier Taiwan Semiconductor Manufacturing reported a 19.4 percent increase in first quarter profit on strong chip demand. Renesas Electronics climbed 2.5 percent.

Toshiba lost 6 percent after reports that the conglomerate plans to reject a buyout proposal from private equity firm CVC Capital Partners.

Australian markets ended on a flat note after reaching a 14-mongh high on Thursday. The benchmark S&P/ASX 200 Index edged up 4.90 points to 7,063.50, while the broader All Ordinaries Index ended up 8.30 points at 7,325.80.

Mining heavyweight BHP rose about half a percent and rival Rio Tinto gained 1 percent as iron ore prices recovered from losses in the previous sessions.

Gold miners Northern Star Resources, Evolution Mining and Newcrest jumped 3-4 percent after bullion prices scaled a more than one-month peak overnight.

Energy stocks underperformed despite crude oil prices reaching fresh four-week highs on an improving demand outlook. Woodside Petroleum and Oil Search fell about 1 percent. Origin Energy plunged almost 9 percent after cutting its annual profit guidance for its energy markets division.

Seoul stocks rose for the fifth straight day as expectations of a global economic rebound and solid corporate earnings boosted investors’ appetite for riskier assets. The benchmark Kospi edged up 4.29 points, or 0.1 percent, to 3,198.62. Pharmaceutical firm Samsung Biologics led the gainers, rising more than 3 percent.

Europe

European stocks have risen to reach fresh record highs on Friday, as strong data out of the United States and China boosted hopes for a swift economic recovery from the coronavirus pandemic.

While the German DAX Index has jumped by 1.1 percent, the U.K.’s FTSE 100 Index and the French CAC 40 Index are up by 0.6 percent and 0.5 percent, respectively.

Dutch bank ING has moved higher after announcing its plan to separate the Management Board Banking roles for technology and operations.

Online supermarket Ocado Group has also advanced. The company announced that it has commercially partnered with Oxford-based autonomous vehicle software company Oxbotica Ltd. to develop a range of vehicles that will be integrated into the Ocado smart platform.

Essentra has also moved to the upside on the day after reporting first quarter trading in line with expectations.

Automaker Daimler has also rallied after its preliminary results for the first-quarter of 2021 came in significantly above market expectations, driven by higher vehicle prices and strong demand for its Mercedes-Benz cars, particularly in China.

BMW, Volkswagen and Renault have also risen after industry data showed Europe’s new car registrations surged in March due to last year’s exceptionally low base of comparison caused by the strict Covid-19 restrictions introduced in most markets in March 2020.

Registrations of new passenger cars increased 87.3 percent annually, in contrast to February’s 19.3 percent decline.

Saint-Gobain has also risen after it agreed to sell 67 percent of its Pipe business in China to a consortium led by local management.

HeidelbergCement has also moved higher. The cement maker said that its preliminary results for the first quarter of 2021 were significantly above market expectations.

Pfeiffer Vacuum Technology AG shares have also jumped. The company reported that its preliminary operating result for the first quarter 2021 increased 76.4 percent.

Meal-kit maker HelloFresh has also moved sharply higher after lifting its 2021 revenue guidance.

On the other hand, cosmetics and beauty products giant L’Oreal Co. has fallen despite the company posting solid sales growth in the first quarter.

In economic news, Eurozone consumer prices increased as initially estimated in March, final data from Eurostat showed.

Inflation accelerated to 1.3 percent in March from 0.9 percent in February. This was the third consecutive rise in prices and matched flash estimate released on March 31.

The euro area trade surplus declined in February as exports decreased amid rising imports, Eurostat reported.

The trade surplus rose to a seasonally adjusted EUR 18.4 billion in February from EUR 28.7 billion in January. Exports decreased 2.5 percent month-on-month, while imports were up 3.4 percent in February.

U.S. Economic Reports

A report released by the Commerce Department on Friday showed a substantial rebound in new residential construction in the U.S. in the month of March.

The Commerce Department said housing starts skyrocketed by 19.4 percent to an annual rate of 1.739 million in March after plunging by 11.3 percent to a revised rate of 1.457 million in February.

Economists had expected housing starts to spike by 13.5 percent to a rate of 1.613 million from the 1.421 million originally reported for the previous month.

With the bigger than expected increase, housing starts reached their highest level since hitting an annual rate of 1.802 million in June of 2006.

Meanwhile, the report showed building permits jumped by 2.7 percent to an annual rate of 1.766 million in March after tumbling by 8.8 percent to a revised rate of 1.720 million in February.

Building permits, an indicator of future housing demand, had been expected to surge up by 4.0 percent to a rate of 1.750 million from the 1.682 million originally reported for the previous month.

At 10 am ET, the University of Michigan is scheduled to release its preliminary report on consumer sentiment in the month of April. The consumer sentiment index is expected to jump to 89.6 in April after spiking to 84.9 in March.

Dallas Federal Reserve President Robert Kaplan is due to participate in a moderated question-and-answer session before a virtual City of Dallas Climate Change Symposium at 10:45 am ET.

At 12:30 pm ET, Kaplan is also scheduled to participate in a moderated question-and-answer session before a virtual Texas A&M University Bitcoin Conference.

Stocks In Focus

Shares of PPG Industries (PPG) are moving significantly higher in pre-market trading after the paints and coatings maker reported first quarter results that exceeded analyst estimates on both the top and bottom lines.

Aluminum producer Alcoa (AA) is also likely to move to the upside in early trading after reporting better than expected first quarter results.

Shares of Sunrun (RUN) are also seeing notable pre-market strength after Simmons Energy upgraded its rating on the solar company’s stock to Overweight.