Fed Chair Jerome Powell's speech at Jackson Hole will be a major highlight of next week.
Graeme Jennings-Pool/Getty ImagesU.S. stocks were slightly higher Friday morning, looking to end a week of selling on a positive note.
Shortly after the open, the Dow Jones Industrial Average rose 142 points, or 0.4%, while the S&P 500 added 0.6% and the Nasdaq Composite rose 0.9%.
Before the U.S. market opened, stocks were down, continuing a selloff among global stocks over the past three sessions. The Dow is down about 1.5% this week and is on pace to snap a two-week winning streak.
A rise in worldwide cases of Covid-19, driven by the more contagious Delta variant of coronavirus, threatens the buoyant narrative of global growth that has injected strength into markets this year.
“The Delta variant remains the biggest worry for investors right now, and along with the question of waning vaccine efficacy has made the risks to the outlook much more pronounced relative to just a few months ago,” said Henry Allen, an analyst at Deutsche Bank.
Meanwhile, investors’ continue to read into messages from the U.S. Federal Reserve for hints on future monetary policy. July meeting minutes of the Federal Open Market Committee suggested that the central bank could begin slowing its massive monthly asset purchases—a pandemic-era measure to add liquidity to financial markets—as soon as this year.
“Nervousness about possible tapering by the Fed ahead of next week’s Jackson Hole speech by Chair Powell, along with a potential Chinese growth slowdown have further played on investors’ minds, and brought the narrative a long way from the reflation hopes many had back in Q1,” Allen said.
But some words this morning from Dallas Federal Reserve President Rob Kaplan enabled stocks to rebound. Kaplan said he may rethink his call for the Fed to quickly taper its asset purchases if the spread of the Delta variant continues slowing economic growth.
In Europe, London’s FTSE 100 and the pan-European Stoxx 600 were both up 0.4%. Paris’ CAC 40 added 0.3% as Germany’s DAX rose 0.1%. In Asia, Tokyo’s Nikkei 225 declined 1% while the Hong Kong Hang Seng fell1.8%, slipping into a bear market, and the Shanghai Composite dropped1.1%.
“Asia markets continue the weakness of the last 24 hours with Japanese auto makers getting clobbered on the back of Toyota’s decision to cut car production in September,” said Michael Hewson, an analyst at broker CMC Markets.
Chinese stocks were also weakened by tough new online privacy laws, adding on to regulatory pressures for the country’s embattled tech sector. Shares in Alibaba fell near 3% in Hong Kong.
Foot Locker (ticker: FL) stock rose 9.3% after reporting a profit of $2.21 a share, beating estimates of $1.01 a share, on sales of $2.3 billion, above expectations for $2.1 billion.
Deere & Co. (DE) stock gained 2.3% after reporting a profit of $5.32 a share, beating estimates of $4.58 a share, on sales of $10.4 billion, above expectations for $10.3 billion.
Applied Materials (AMAT) stock slipped 1.5% after reporting a profit of $1.90 a share, beating estimates of $1.77 a share, on sales of $6.2 billion, above expectations for $5.9 billion.
Ross Stores (ROST) stock fell 4.8% after reporting a profit of $1.39 a share, beating estimates of 96 cents a share, on sales of $4.8 billion, above expectations for $4.5 billion.
Workday (WDAY) stock rose 1.75% after Oppenheimer resumed coverage with an outperform rating.
Write to Jacob Sonenshine at jacob.sonenshine@barrons.com
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August 20, 2021 at 09:30PM
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Stocks Are Rising, Closing Out a Rough Week on a High Note - Barron's
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