The Friday Market Minute
- Global stocks grind higher following yesterday's inflation surprise and ECB rate meeting, with the S&P 500 poised for a fresh record peak as Treasury yields retreat.
- Senior Senate lawmakers agree blueprint for a $1.2 trillion infrastructure bill, reports suggest, with just under $580 billion in new spending spread out over eight years.
- Benchmark 10-year note yields fall to 1.43% amid the biggest weekly pullback for Treasuries in more than a year; dollar index holds firm at 90.183.
- CDC data shows 141.6 million Americans have now been fully vaccinated against the coronavirus, with around 305.7 million doses administered as of Thursday.
- U.S. equity futures suggest a mixed open following faster-than-expected May inflation data and another decline in weekly jobless claims.
U.S. equity futures moved higher Friday, taking the S&P 500 deeper into record territory, as investors looked through the fastest inflation surge in thirteen years to focus on recovery prospects in the world's largest economy.
Stocks got a boost last night, and again in pre-market trading Friday, by the steepest pullback in Treasury bond yields in more than a year, which dragged 10-year note yields to a multi-month low of 1.43% in overnight trading despite yesterday's May inflation data which showed the hottest rate of prices increases -- even after stripping out food and energy -- since the early 1990s.
A smaller-than-expected infrastructure bill total appears to be emerging from a bi-partisan group of senior Senate lawmakers, as well, with reports of a $1.2 trillion deal to be put to President Joe Biden later next week.
Whether bond yields are in retreat because investors are buying into the Federal Reserve's narrative that inflation pressures will ease over the second half of the year, or they're worried that supply chain bottlenecks and labor market shortages will hold back growth is still a matter for debate.
Stocks, however, appear to have move past both concerns heading into next week's Fed meeting and the start of the second quarter earnings season in early July, which is expected to show a 52.5% increase in collective S&P 500 profits, taking the share-weighted total to around $412.5 billion.
Adjusted for inflation -- at least at current levels -- however, suggest those totals could be the lowest since November 1980.
Futures contracts tied to the Dow Jones Industrial Average suggest a 110 point opening bell gain, with the S&P 500 priced for an 8 point addition to last night' record high close of 4,239.18 points.
Nasdaq Composite futures, meanwhile, are indicating the chance of a fifth consecutive day of gains for the tech-focused benchmark, with Apple (AAPL) - Get Report and Tesla (TSLA) - Get Report once again leading the pre-market advance,
Meme stocks were also finding some early support following last night's 27% slump in shares of GameStop (GME) - Get Report, which posted a first quarter loss, unveiled plans for a capital increase and said the Securities and Exchange Commission had requested documents linked to an undisclosed investigation.
Oil prices extended gains Friday, lifting U.S. crude prices to fresh multi-year highs, following a price target increase from Goldman Sachs, which sees Brent trading north of $80 a barrel later this year, and improved demand prospects from major economies such as Germany and China.
Brent crude contracts for August delivery, the global benchmark, added 16 cents from Thursday's close in New York to trade at $72.68 per barrel while WTI crude was marked 10 cents higher at $70.39 per barrel.
In overseas markets, European stocks hit a fresh record high with the Stoxx 600 rising 0.4% on the session, thanks in part to a torrid pandemic recovery growth rate for the U.K. economy and the European Central Bank's Thursday pledge to maintain its record low rates and bond market support well into next year.
Overnight in Asia, the region-wide MSCI ex-Japan benchmark rose 0.31% on the session as gains in Hong Kong and South Korea offset weakness in China, while the Nikkei 225 in Tokyo ended the Friday session littel-changed at 28,948.73 points.