Optimism About Tech Earnings May Lead To Continued Advance On Wall Street

The major U.S. index futures are currently pointing to a higher open on Friday, with stocks likely to extend the notable upward move seen over the course of the previous session.

Technology stocks may see continued strength after helping lead the advance on Thursday, when the tech-heavy Nasdaq surged by 1.4 percent.

Optimism about the outlook for earnings may contribute to continued strength in the tech sector ahead of next week’s release of quarterly results from companies like Intel (INTC), IBM Corp. (IBM) and Netflix (NFLX).

The Dow may also receive a boost from a jump by shares of Travelers (TRV), with the insurance giant spiking by 4.9 percent in pre-market trading.

Travelers is moving sharply higher after the company reported fourth quarter earnings that exceeded analyst estimates.

Stocks moved mostly higher over the course of the trading day on Thursday, largely offsetting the weakness seen to start the week. The major averages all moved to the upside, with the tech-heavy Nasdaq leading the advance.

The major averages reached new highs late in the session, closing firmly in positive territory. The Nasdaq surged 200.03 points or 1.4 percent to 15,055.65, the S&P 500 advanced 41.73 points or 0.9 percent to 4,780.93 and the S&P 500 climbed 201.94 points or 0.5 percent to 37,468.61.

Tech stocks helped lead the way higher on Wall Street, with shares of Apple (AAPL) jumping by 3.3 percent after Bank of America upgraded its rating on the company’s stock to Buy from Neutral.

A rally by semiconductor stocks also contributed to the surge by the Nasdaq, as the Philadelphia Semiconductor Index spiked by 3.4 percent.

Taiwan Semiconductor (TSM) helped lead the sector higher, soaring 9.8 percent after reporting better than expected fourth quarter results and providing upbeat guidance.

Networking, computer hardware and software stocks also showed notable moves to the upside over the course of the session.

Outside the tech sector, airline stocks saw substantial strength on the day, resulting in a 3.6 percent surge by the NYSE Arca Airline Index. The index bounced off its lowest closing level in well over a month.

Oil service and housing stocks also saw considerable strength, while interest-rate sensitive utilities stocks bucked the uptrend.

The rebound on Wall Street came despite a continued increase by treasury yields, which moved higher after the Labor Department released a report showing an unexpected weekly decrease in first-time claims for U.S. unemployment benefits.

The report said initial jobless claims fell to 187,000 in the week ended January 13th, a decrease of 16,000 from the previous week’s revised level of 203,000.

Economists had expected jobless claims to inch up to 207,000 from the 202,000 originally reported for the previous week.

With the unexpected decline, jobless claims dropped to their lowest level since hitting 182,000 in the week ended September 24, 2022.

Commodity, Currency Markets

Crude oil futures are slipping $0.12 to $73.96 a barrel after jumping $1.52 to $74.08 a barrel on Thursday. Meanwhile, after climbing $15.10 to $2,021.60 an ounce in the previous session, gold futures are advancing $17.80 to $2,039.40 an ounce.

On the currency front, the U.S. dollar is trading at 148.14 yen versus the 148.16 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.0879 compared to yesterday’s $1.0876.

Asia

Asian stocks ended mixed on Friday, even as softening Fed expectations and bullish forecasts on AI demand lifted technology stocks.

The dollar consolidated weekly gains, while gold headed for a weekly loss on the recalibration of Fed rate-cut bets.

Oil prices were a tad lower after rising in the U.S. trading session overnight on heightened geopolitical tensions, higher forecasts for global oil demand and data showing a drop in U.S. crude stockpiles last week.

China’s Shanghai Composite Index dropped 0.5 percent to 2,832.28 after reports the country’s largest brokerage has suspended short selling for some clients in mainland markets.

Hong Kong’s Hang Seng Index fell 0.5 percent to 15,308.69, recording a third consecutive weekly loss on worries about China’s economic recovery.

Japanese shares snapped a three-day losing streak and ended at a fresh 34-year high, as signs of slowing inflation for a second straight month boosted bets the Bank of Japan will keep its ultra-low interest rates steady next week.

The Nikkei 225 Index rallied 1.4 percent to 35,963.27, while the broader Topix Index settled 0.7 percent higher at 2,510.03.

Technology stocks rose, with Screen Holdings, Tokyo Electron and Advantest climbing 6-8 percent on hopes for robust semiconductor demand this year.

Seoul stocks advanced and ended the week with notable gains, with big tech stocks leading the way. The Kospi jumped 1.3 percent to 2,472.74. Market bellwether Samsung Electronics surged 4.2 percent and No.2 chipmaker SK Hynix added 3.7 percent.

Australian markets snapped a five-day losing streak, with miners, financials and energy stocks pacing the gainers. The benchmark S&P/ASX 200 Index gained 1.0 percent to close at 7,421.20, while the broader All Ordinaries Index ended 1.0 percent higher at 7,652.30.

Whitehaven Coal rallied 3.8 percent after reports that the coal miner is exploring options to sell a 20 percent stake in the Blackwater mine to global steelmakers.

Across the Tasman Sea, New Zealand’s benchmark S&P/NZX 50 Index ended down 0.2 percent at 11,666.07, giving up initial gains.

Europe

European stocks are seeing modest gains on Friday as European Central Bank President Christine Lagarde acknowledging during a panel in Davos that inflation is coming down in the Eurozone but refrained from specifically commenting on monetary policy.

Lagarde warned earlier this week that cutting interest rates too soon could threaten Europe’s progress in battling the inflation.

The British pound fell against the euro, dollar and other currencies after data showed British retailers suffered the biggest drop in sales for almost three years during December, increasing the odds of an early rate cut by the Bank of England.

Retail sales declined 3.2 percent in December, reversing the 1.4 percent increase in November. The decline was also bigger than forecast of 0.5 percent drop. On a yearly basis, overall retail sales declined 2.4 percent after a 0.2 percent gain.

Elsewhere, German producer prices declined for the sixth straight month in December due to cheaper energy costs.

While the U.K.’s FTSE 100 Index is up by 0.4 percent, the German DAX Index is up by 0.2 percent and the French CAC 40 Index is just above the unchanged line.

In corporate news, food delivery company Deliveroo has edged up slightly after saying it expects 2023 earnings slightly ahead of guidance.

4imprint Group shares have jumped. The direct marketer of promotional products said that it is expecting profit as well as revenue for the full year to increase from last year.

BASF has also moved to the upside after the German chemicals major said that it expects to swing to a net income of €225 million in 2023.

U.S. Economic Reports

The National Association of Realtors is scheduled to release its report on existing home sales in the month of December at 10 am ET.

Existing home sales are expected to come in unchanged in December after climbing by 0.8 percent to an annual rate of 3.82 million in November.

Also at 10 am ET, the University of Michigan is due to release its preliminary reading on consumer sentiment in the month of January. The consumer sentiment index is expected to inch up to 70.0 in January after jumping to 69.7 in December.

San Francisco Federal Reserve President Mary Daly is scheduled to appear in a live interview on Fox Business at 11:15 am ET.

At 1 pm ET, Federal Reserve Vice Chair for Supervision Michael Barr is due to participate in a discussion on “Bank Regulation” before the Responsible AI Symposium: Advancing a Blueprint for Tech Equity hosted by the National Fair Housing Alliance.

Daly is also scheduled to participate in fireside chat before a hybrid event, “A Future Outlook: Innovation & Economic Growth in San Diego,” at 4:15 pm ET.

Stocks In Focus

Shares of Wayfair (W) are moving sharply higher in pre-market trading after the online furniture retailer announced a workforce reduction involving approximately 1,650 employees, representing approximately 13 percent of its global workforce and approximately 19 percent of its corporate team.

Discount airline Spirit Airlines (SAVE) is also seeing substantial pre-market strength after forecasting fourth quarter revenues toward the high end of its previous guidance.

On the other hand, shares of iRobot (IRBT) are plunging in pre-market trading after a report from the Wall Street Journal said the European Union’s competition watchdog intends to block Amazon’s (AMZN) $1.7 billion bid to acquire the Roomba maker.