Friday stocks rose across the board on Friday in response to better-than-expected February inflation data. The Federal Reserve’s inflation level, based on core personal consumption expenditures, reached just 1.5 percent, well below the government’s target of 2 percent.
The S&P 500 rose 1.7 percent that day, the Dow 1.39 percent and the Nasdaq 1.48 percent. Friday was the highest gain for the S&P 500 in three weeks. The Russell 2000 Small Cap Index rose 1.76 percent on Friday.
Financials on Friday due to favorable regulatory developments. The Fed lifted restrictions on big banks adding dividends and share buybacks, so the emergency limits triggered by the pandemic expire on June 30th.
SPDR Consumer Staples (XLP) was the best performing sector. It was up 3.94 percent as investors held onto defensive stocks. Vanguard Dividend Appreciation (VIG) returned 2.05 percent and iShares Edge MSCI Minimum Volatility USA (USMV) increased 2.98 percent. IShares Edge SPDR (XLK) technology rose 2.59 percent over the week as stocks like Mastercard (MA) and Visa (V) rallied the sector.
Energy and healthcare stocks also performed well. The Energy Select Sector SPDR Fund (XLE) closed on Friday at 2.48 percent. The SPDR fund (XLV) for the selected health care sector also increased by 1.89 percent that day.
The US dollar index rose 0.81 percent this week. That was a headwind for funds from developed and emerging countries. iShares MSCI EAFE (EFA) rose 0.24 percent, while iShares MSCI Emerging Markets (EEM) fell 1.37 percent.
A ship blocking the Suez Canal threatens to accelerate rising prices in the economy. The ship turned off the narrow center of the canal and ran aground. The blockade costs shipping lines $ 9 billion a day in direct losses. Rising prices and delays are likely to increase costs even further. Commodity producer stocks benefited from the news, along with bullish news on Alcoa (AA). The aluminum giant gained 10.52 percent on Friday. Crude oil also benefited, rising 4.12 percent that day.
On Friday, the yield on the 10-year Treasury note rose to 1.67 percent.
West Texas Intermediate crude oil prices on Friday rose 3.8 percent to $ 60.80 a barrel. Gold prices also rose that day, up 0.3 percent on Friday to $ 1,731.61 an ounce.
Thursday’s unemployment data marked the first time since the pandemic that jobless claims fell below the 700,000 mark. Last week’s unemployment report fell by 100,000 to 684,000.
Additional deposits from the latest federal economic checks hit millions of bank accounts last week, which is likely to spur consumer spending in the short term.
Existing home sales slowed to a pace of 6.22 million in February as bad weather and the Texas blackout hampered activity. New home sales also declined to an annual pace of 775,000 homes.
The University of Michigan’s consumer sentiment score rose from 76.8 to 84.9 during the month, well above consensus expectation of 83.6. This follows improved unemployment data, advances in vaccine adoption and optimism about the macroeconomic recovery.
Analysts have raised gross domestic product forecasts to 7.0 percent, beating the Federal Reserve’s forecast of 6.5 percent for the year. The increase reflects the possibility of increased pre-supply demand for many consumer goods and takes into account short-term inflation concerns that generally persist.
This week, Fed Chairman Jerome Powell reiterated earlier public statements that the Fed remains determined to accommodate the ongoing economic recovery and confirmed that future policy changes regarding interest rates will be communicated early.