US Market

The major U.S. index futures are currently pointing to a higher open on Friday, with stocks likely to add to the gains posted in the previous session.

Bargain hunting may contribute to continued strength on Wall Street, as traders continue to pick up stocks at relatively reduced levels.

While the Nasdaq and the S&P 500 closed higher in each of the two previous sessions, the major averages remain near their lowest levels in over three months.

The futures remained positive following the release of closely watched inflation data that came in line with economist estimates.

The Commerce Department report said the annual rate of consumer price growth accelerated to 3.5 percent in August from 3.4 percent in July. The modest acceleration matched economist estimates.

Meanwhile, the annual rate of growth by core consumer prices, which exclude food and energy prices, slowed to 3.9 percent in August from 4.3 percent in July. The slowdown also matched expectations.

After ending Wednesday’s volatile session narrowly mixed, stocks moved mostly higher during trading on Thursday. The major averages all moved to the upside on the day, with the tech-heavy Nasdaq leading the advance.

While the Nasdaq climbed 108.42 points or 0.8 percent to 13,201.28, the S&P 500 increased 25.19 points or 0.6 percent to 4,299.70 and the Dow rose 116.07 points or 0.4 percent to 33,666.34.

The strength on Wall Street partly reflected bargain hunting, as traders picked up stocks at reduced levels following recent weakness.

Concerns about the outlook for interest rates have weighed on the markets in recent session, dragging the major averages down to their lowest levels in three months.

A downturn by treasury yields also contributed to the strength among stocks, with the yield on the benchmark ten-year note giving back ground after reaching its highest levels since October 2007.

Meanwhile, traders were also looking ahead to remarks by Federal Reserve Chair Jerome Powell, which kicked off just as the markets closed.

Powell hosted a town hall with educators in Washington, D.C. and nationwide via webcast, with the Fed chief set to respond to questions from the in-person audience and virtual participants from across the country.

On the economic front, the Commerce Department released a report this morning showing the pace of U.S. economic growth in the second quarter of 2023 was unrevised from the previous estimate.

The Commerce Department said real gross domestic product increased by 2.1 percent in the second quarter, unrevised from the estimate provided last month. The unrevised reading matched economist estimates.

The unrevised GDP growth in the second quarter still reflects a slight slowdown compared to the 2.2 percent growth in the first quarter.

A separate report released by the Labor Department showed a slight increase in first-time claims for U.S. unemployment benefits in the week ended September 23rd.

The Labor Department said initial jobless claims crept up to 204,000, an increase of 2,000 from the previous week’s revised level of 202,000.

Economists had expected jobless claims to rise to 215,000 from the 201,000 originally reported for the previous week.

Semiconductor stocks showed a strong move to the upside on the day, driving the Philadelphia Semiconductor Index up by 1.8 percent. The index climbed further off their four-month closing low set on Tuesday.

Considerable strength was also visible among computer hardware stocks, as reflected by the 1.7 percent gain being posted by the NYSE Arca Computer Hardware Index.

Networking, housing and brokerage stocks also saw notable strength, while interest rate-sensitive utilities stocks saw further downside.

U.S. Economic Reports

Personal income in the U.S. increased in line with economist estimates in the month of August, according to a report released by the Commerce Department on Friday.

The report said personal income climbed by 0.4 percent in August after rising by 0.2 percent in July. The advance matched economist estimates.

The Commerce Department said personal spending also increased by 0.4 percent in August after jumping by an upwardly revised 0.9 percent in July.

Economists had expected personal spending to rise by 0.4 percent compared to the 0.8 percent advance originally reported for the previous month.

The report also said the annual rate of consumer price growth accelerated to 3.5 percent in August from 3.4 percent in July. The modest acceleration matched economist estimates.

Meanwhile, the annual rate of growth by core consumer prices, which exclude food and energy prices, slowed to 3.9 percent in August from 4.3 percent in July. The slowdown also matched expectations.

At 9:45 am ET, MNI Indicators is scheduled to release its report on Chicago-area business activity in the month of September. The Chicago business barometer is expected to slip to 47.6 in September from 48.7 in August, with a reading below 50 indicating contraction.

The University of Michigan is due to release its revised reading on consumer sentiment in the month of September at 10 am ET. The consumer sentiment index is expected to be unrevised at 67.7.

At 12:45 pm ET, New York Federal Reserve President John Williams is due to deliver remarks and participate in a moderated discussion on the economic outlook and monetary policy before the Long Island Association Regional Economic Briefing.

Europe

European shares have risen on Friday, extending gains from the previous session after data showed Eurozone inflation hit a two-year low in September – supporting expectations that the European Central Bank will keep interest rates on hold.

Eurostat reported that the Eurozone’s annual inflation rate fell to 4.3 percent year-on-year in September, marking the lowest level since October 2021.

Elsewhere, data showed the British economy grew stronger than expected in the first quarter.

Revised data showed that GDP rose by 0.3 percent between January and March, up from the 0.1 percent growth previously estimated.

GDP growth for 2022 as a whole was revised up to 4.3 percent, while second-quarter growth was unrevised at 0.2 percent.

While the French CAC 40 Index has jumped by 1.1 percent, the German DAX Index is up by 1.0 percent and the U.K.’s FTSE 100 Index is up by 0.6 percent.

China-exposed luxury stocks traded higher, with Richemont, LVMH, Kering and Hermes International rallying 2-4 percent on expectations of increased sales during the Golden Week holiday in mainland China.

JD Sports Fashion, Puma and Adidas jumped 5-6 percent after Nike topped Wall Street estimates for first-quarter profit.

Commerzbank AG jumped 11 percent after an announcement that it was revamping its pay-out policy for investors.

The German lender said it intends to return a total of 3 billion euros to shareholders as dividends and share buy-backs for period of 2022 to 2024. To reach the target, the pay-out ratio will be at least 70 percent in 2024.

Shares of Aston Martin Lagonda Global Holdings soared 12 percent in London after an announcement that Yew Tree consortium has agreed to buy an additional 3.27 percent or 26 million common shares in the automobile company.

Water and wastewater services provider Severn Trent rallied 3 percent after it announced a plan to invest about 12.9 billion pounds across the next five-year regulatory period.

Syncona, a healthcare company, climbed 6.4 percent on share buyback news.

3i Infrastructure gained 1 percent after the infrastructure investment group said it is on track to deliver the fiscal year 2024 dividend target of 11.90 pence per share, up 6.7 percent from fiscal year 2023.

Specialist media firm Future surged 21 percent after retaining its annual earnings guidance despite continued macroeconomic volatility.

Asia

Asian stocks ended mostly higher on Friday, with Hong Kong leading regional gains. Trading volumes were thin due to holidays in mainland China and South Korea.

Underlying sentiment was underpinned by a fall in oil prices and declining bond yields ahead of key U.S. inflation data due later in the day.

The dollar pulled back, helping gold prices recover some lost ground. Oil prices were marginally higher in Asian trade after falling sharply overnight on expectations of supply increases by Russia and South Korea.

Hong Kong’s Hang Seng Index jumped 2.5 percent to 17,809.66 ahead of China PMI data due over the weekend. Tech stocks topped the gainers list after the release of draft rules by China’s cyberspace regulator to ease cross-border data-security controls.

Japanese shares ended little changed in the final trading day of the week as investors reacted to a mixed bag of economic readings.

Japan’s factory output was flat in August and retail sales grew 7 percent from a year earlier in the month while core inflation in Tokyo slowed in September for the third straight month, a slew of data showed.

The unemployment rate in August came in at 2.7 percent, unchanged from the previous month.

The Nikkei 225 Index finished marginally lower at 31,857.62 as shipping stocks fell on going ex-dividend and energy stocks tracked oil prices lower.

Tech stocks surged, with Advantest and Tokyo Electron both climbing around 3 percent each. The broader Topix Index settled 0.9 percent lower at 2,323.39.

In Australia, the benchmark S&P/ASX 200 Index rose 0.3 percent to 7,048.60, snapping a three-day losing streak on hopes that the RBA meeting in October will result in another pause. The broader All Ordinaries Index gained 0.4 percent to close at 7,249.70.

Core lithium shares soared 19.1 percent after the company turned profitable for the first time.

Across the Tasman, New Zealand’s benchmark S&P NZX-50 Index rallied 1.1 percent to 11,296.43 after a late rebound on the back of end-of-quarter buying.      

Commodities

Crude oil futures are jumping $1.18 to $92.89 a barrel after tumbling $1.97 to $91.71 a barrel on Thursday. Meanwhile, after falling $12.30 to $1,878.60 an ounce in the previous session, gold futures are climbing $10.70 to $1,889.30 an ounce.

On the currency front, the U.S. dollar is trading at 149.11 yen versus the 149.31 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.0603 compared to yesterday’s $1.0566.