By Chris Matthews, MarketWatch
5-day winning streak at stake as stocks log best start to a new
year since 2006
Stock benchmarks were set to retreat on Friday investors,
threatening to snap a five-day streak that helped to drive the Dow
and the S&P 500 out of correction territory, at least by one
measure.
How did major benchmarks fare?
Futures for the Dow Jones Industrial Average fell 75 points, or
0.4% to 23,882, while S&P 500 index futures slipped by 8.35
points, or 0.3% to 2,585.50. Nasdaq-100 futures receded 29 points,
or 0.4%, to 6,596.25.
On Thursday, the Dow Jones Industrial Average rose 122.80
points, or 0.5%, to 24,001.92, and the S&P 500 advanced 11.68
points, or 0.5%, to 2,596.64. The Nasdaq Composite Index added
28.99 points, or 0.4%, to 6,986.07.
Need to Know:Here's what might stock the stock market's
post-December bounce
(http://www.marketwatch.com/story/heres-what-might-stop-the-stock-markets-post-december-bounce-2019-01-11)
Both the Dow and the S&P finished the day up more than 10%
from their December lows, marking their exit from correction
territory, or when an asset drops 10% from its recent peak.
Read:The stock market just got off to its best start in 13 years
(http://www.marketwatch.com/story/the-stock-market-just-got-off-to-its-best-start-in-13-years-2019-01-10)
What's driving the market?
Investors have taken solace in speeches by Federal Reserve
officials in recent weeks, as they have continued to spread the
message that the central bank will be cautious in its approach to
raising interest rates this year.
Fed Chairman Jerome Powell reinforced that message Thursday
during a during a discussion at the Economic Club of Washington
stressing that the central bank will be "flexible" and "patient" on
monetary policy as inflation is "under control."
Earlier in the day, a reading of December inflation, the
consumer-price index slipped 0.1% in to mark the first decline in
nine months, the Labor Department said on Friday. That matched the
forecast of economists polled by MarketWatch. The increase in the
cost of living over the past 12 months slowed to 1.9% from 2.2%,
the first time it's fallen below the key 2% mark since August 2017,
but also matched expectations.
The report offers investors a measure of how quickly prices are
rising--with higher inflation a potential driver of lower corporate
profit margins and more aggressive Fed rate increases.
Investors will also be digesting incrementally good news on the
U.S.-China trade front, after U.S. Treasury Secretary Steven
Mnuchin told reporters Thursday night that Vice Premier Liu He, the
most senior economic policy adviser to President Xi Jinping, would
travel to Washington later in January
(http://www.marketwatch.com/story/chinas-top-trade-official-expected-to-visit-us-for-trade-talks-mnuchin-says-2019-01-10)
to continue trade negotiations, talks that have been seen by
markets as gaining momentum this week.
Meanwhile, the partial U.S. government shutdown entered its 21st
day, tying the record for the longest in history. While markets
have so far shrugged off the drama in Washington, hundreds of
thousands of federal workers won't receive paychecks this week, and
economists warn that the economic effects of the shutdown could
grow significant as the standoff drags on.
What are the analysts saying?
"Stocks are loving that central bank policy appears to be in an
ultra-dovish mode," wrote Edward Moya, chief market strategist at
Oanda, in a note. "Inflation is low and under control and the main
catalyst for the Fed's ability to be patient. If we see softer
prints, we could see yields drop and stocks continue their
rally."
Which stocks are in focus?
Shares of Netflix Inc. (NFLX) rose 2.1% in premarket action,
after the firm was upgraded to strong buy from outperform at
Raymond James.
Chico's FAS Inc. (CHS) stock was up 1.9% before the bell
Thursday, after the firm announced the closure of 250 stores
(http://www.marketwatch.com/story/chicos-fas-to-close-250-stores-in-us-over-three-year-period-as-part-of-digital-expansion-2019-01-11),
as part of an overhaul, with the aim of improving its online
offering and customer service.
Activision Blizzard Inc. (ATVI) shares were down 7.5% in
premarket trade, after the firm announced Thursday
(http://www.marketwatch.com/story/activision-blizzard-cuts-ties-to-destiny-studio-2019-01-10)evening
that it was ceding rights to the "Destiny" franchise to Bungie Inc.
Following the move, Benchmark cut its price target on the stock
from $93 to $87, and KeyBanc Capital slashed its price target from
$80 to $64.
How are other markets trading?
Markets in Asia rallied
(http://www.marketwatch.com/story/fed-restraint-trade-hopes-bolster-asian-markets-2019-01-10)
Friday, with Japan's Nikkei closing 1% higher, while Hong Kong's
Hang Seng Index added 0.6%, and China's Shanghai Composite advanced
0.7%.
In Europe, stocks edged lower
(http://www.marketwatch.com/story/european-markets-up-despite-latest-auto-and-retail-woes-2019-01-11),
with the Stoxx Europe 600 down 0.2%.
Crude oil was gunning to extend its winning streak
(http://www.marketwatch.com/story/oil-prices-lifted-for-10th-day-as-dollar-softens-2019-01-11)
to 10 sessions. Gold prices advanced 0.4%, while the U.S. dollar
(http://www.marketwatch.com/story/british-pound-climbs-as-likelihood-of-brexit-delay-rises-2019-01-11)
fell 0.3%.
(END) Dow Jones Newswires
January 11, 2019 08:52 ET (13:52 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.