U.S. stock futures are pointing to a higher open on Friday, with the S&P 500 aiming for new highs and technology stocks expected to lead the way. The release of consumer sentiment and housing data is also anticipated later in the day.
Stock-Index Futures Performance
- S&P 500 futures (ES00) rose 15.25 points, or 0.3%, to 4,826.
- Dow Jones Industrial Average futures (YM00) gained 45 points, or 0.1%, reaching 37,702.
- Nasdaq-100 futures (NQ00) jumped 97.25 points, or 0.5%, to 17,206.
Previous Day’s Market Overview
On Thursday, the S&P 500 (SPX) increased by 41.73 points or 0.9%, closing at 4,780.94. The Dow industrials (DJIA) rose by 201.94 points, or 0.5%, ending at 37,468.61, breaking a three-day losing streak. The Nasdaq Composite (COMP) experienced a surge of 200.03 points, or almost 1.4%, reaching 15,055.65.
The S&P 500 is currently only 0.33% away from its record close of 4,796.56 on January 3, 2022. The futures market indicates that the index may surpass this level during Friday’s trading session.
Technology Stocks Boosted by Taiwan Semiconductor Manufacturing Co.
Tech stocks are expected to receive a boost, as enthusiasm for the sector is likely to continue on Friday. Taiwan Semiconductor Manufacturing Co. (TSMC) reported better-than-expected forecasts and results on Thursday, contributing to a strong performance for the Nasdaq Composite.
Furthermore, TSMC’s positive news helped the S&P 500 and Nasdaq recover losses from 2024. Currently, the Nasdaq is the only major index poised for a weekly gain, up 0.5% compared to a 0.3% drop for the Dow industrials and little change for the S&P 500, as reported by FactSet.
TSCM Shares Surge in Taiwan
TSCM shares experienced a significant boost in Taiwan on Friday following a strong performance by U.S.-listed shares.
Reflation Trade and Technology Stocks
A senior analyst at Swissquote Bank, Ipek Ozkardeskaya, highlighted that the reflation trade seems to be nonexistent at the moment. Instead, she emphasized the popularity of long technology positions. According to her analysis, Nasdaq-100 net long positions have reached their highest levels in almost two years. While this extended positioning exposes Nasdaq stocks to potential sell-offs, Ozkardeskaya believes that the technology sector will remain well-funded due to softening Fed expectations and robust AI-demand.
Federal Reserve and Economic Outlook
Initially, the markets anticipated a total of six or seven interest rate cuts by the Federal Reserve in 2024. However, these expectations have been pushed back, primarily due to strong economic data, including impressive retail sales figures earlier in the week.
Key Data and Appearances
Preliminary consumer sentiment for January is set to be released at 10 a.m., along with existing home sales data for December. Additionally, several notable Federal Reserve officials will be making appearances throughout the day. This includes Chicago Fed President Austan Goolsbee at 8:30 a.m., Fed Vice Chair for Supervision Michael Barr at 1 p.m., and San Francisco Fed President Mary Daly at 4:15 p.m.
Company Reports
Several companies are scheduled to report their latest updates on Friday. This includes Schlumberger NV (SLB), Travelers Cos (TRV), Fifth Third Bancorp (FITB), State Street Corp. (STT), and Comerica Inc. (CMA).
