Stocks Up On Friday, And For The Week Image: Bigstock Stocks closed higher on Friday and for the week, making it two up weeks in a row for the Dow, S&P, and Nasdaq, and 3 in a row for the small-cap Russell 2000. Thursday's better than expected Consumer Price Index (CPI) inflation report continued to underpin the market on Friday. All of the major inflation gauges have been ticking lower lately (CPI, PPI, PCE, and even wage inflation, as referenced in the latest Employment report). And markets have been cheering the news. The markets had more to cheer about on Friday as many of the big banks posted better than expected earnings. Before the open on Friday, Bank of America posted a positive EPS surprise of 11.8% (they were up 2.20% on the day); JPMorgan Chase posted a positive EPS surprise of 14.8% (they were up by 2.52%); Wells Fargo posted a positive EPS surprise of 6.35% (they were up 3.25%); and BlackRock posted a positive EPS surprise of 11.7% (although, they were flat on the day). Citigroup, however, was one of the big banks that missed estimates, posting a negative EPS surprise of -6.78%. But they beat on revenue with a positive sales surprise of 0.54%. They were up 1.69% on the day. We'll get more big bank action today with Goldman Sachs and Morgan Stanley set to report. Then on Wednesday we'll hear from financial heavyweights Charles Schwab, PNC Financial, and Discover Financial Services. We'll hear from many others as well, and from different industries. But financials are some of the first to report. And that's the unofficial kick-off to earnings season. In other news on Friday, the Consumer Sentiment Index increased to 64.6 from last month's 59.7 and views for 60.0. We'll get our next look at inflation on Wednesday with the Producer Price Index (PPI) report. And then another look a week later on Friday, 1/27, with the Personal Consumption Expenditures (PCE) report. And then a week after that on Wednesday, 2/1, the Fed will make their announcement on their next rate hike. At the moment, it's expected to be reduced to 25 basis points vs. December's 50 basis points. But as they've said, they are data dependent, so the next two inflation reports (amongst other things), will be considered before they make their next move. In the meantime, stocks are off to a great start this year. A welcomed change vs. last year at this time. See you tomorrow, Kevin Matras Executive Vice President, Zacks Investment Research |
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