U.S. stocks extended gains Friday, following on from the best day for the S&P 500 in six months, as corporate earnings and improving sentiment offset persistent concerns that inflation will continue to shroud markets over the months ahead.
Markets were given an added early boost, as well, from stronger-than-expected third quarter earnings from Goldman Sachs (GS) - Get Goldman Sachs Group, Inc. (GS) Report and a surprise 0.7% month-on-month gain for U.S. retail sales.
European stocks are on pace for their best week in seven months, with the Stoxx 600 up 0.3% in mid-day trading in Frankfurt, while Japan's Nikkei 225 closed at a two-week high as markets keyed on solid U.S. bank and corporate earnings and looked to today's reading of September retail sales data to confirm consumer strength in the world's biggest economy.
Oil prices were also on the rise, however, with Brent crude futures trading at the highest levels in three years, underscoring the impact of both the energy crush rolling through Europe and Asia and the impact of supply-chain disruptions on commodity markets.
U.S. inflation rates, in fact, have run at an annualized rate of 7.2% over the past six months, the highest since the 1980s, while shipping rates are up 210% from last year and food prices 33%, according to data from Bank of America's weekly "Flow Show" report. A closely-tracked market-based gauge of inflation expectations, meanwhile, is trading at the highest levels since May.
At the same time, the report noted, wage pressures and labor shortages for U.S. small businesses are the worst in 50 years, setting up the risk of a central bank policy shift from "pro-growth to anti-inflation" that could test the current market rally.
Still, with the five biggest U.S. banks reporting collective third quarter profits of nearly $30 billion this week, and Goldman Sachs (GS) - Get Goldman Sachs Group, Inc. (GS) Report adding to the tally, stocks are again firmly in the green Friday with the Dow Jones Industrial Average rising 240 points thanks to a 50-point contribution from Goldman's 2% gain.
The S&P 500 is up 21 points while the Nasdaq Composite gained 33 points gain as benchmark 10-year note yields nudged to 1.567% in early New York trading following the retail sales release.
Alcoa Corp (AA) - Get Alcoa Corp. Report shares surged 12.22% after the aluminum producer posted record third quarter profits late Thursday unveiled a new buyback program and declared its first-ever dividend.
Moderna (MRNA) - Get Moderna, Inc. Report stock gained more than 1.3% after a U.S. Food and Drug Administration panel gave its approval to a third half-dose booster shot to some Americans to bolster protection against COVID-19.
Away from equities, Bitcoin prices topped the $60,000 mark for the first time in six months in overnight trading amid reports that the U.S. Securities and Exchange Commission is set to approve the first set of exchange traded funds linked to the world's biggest cryptocurrency.
Bitcoin prices were last marked 2.2% higher on the day at $58,940 each.
In commodity markets, three-month copper prices on the London Metals Exchange passed $10,000 a ton in early Friday trading, extending its one-week gain to around 7.1%, the strongest since 2016,. following a surprise jump in China imports last month and bets on a robust global economic recovery.
WTI crude futures for November delivery were marked 67 cents higher on the session at $81.98 per barrel after Energy Department stockpile data showed a 1.97 million barrel decline in domestic stockpiles at the Cushing deliver hub. Brent contracts for December, the global pricing benchmark, were up 70 cents at $84.69 per barrel.