US top stocks ended flat after their rout in a Trump-inspired stock rotation, but smaller stocks had a second successive session of large gains on Friday.
The S&P 500 ended down 0.14% at 2164 – a modest affair compared with Thursday losses – and 64 points higher than where they began the week which framed a shock presidential election result as Donald Trump won the keys to the White House.
Meanwhile, the S&P Midcap 400 managed to extend Thursday gains and rise by 1% to 1562 – also advancing by 70 points on the week.
The S&P Smallcap 600, which raced higher on Thursday, did it again on Friday, up 2.6% to 781 – 65 points higher since the opening of business on Monday.
The wider small-cap ticker, the Russell 2000, was up 2.4% to 1281 on Friday – 116 points higher than where it began the week.
Conversely, there were sharper losses across the northern border in Toronto, where the TSX Composite closed down 1.3% at 14,555. The Canadian ticker shed 41 points since the start of the week
Among stocks, Nvidia Corp (NASDAQ:NVDA) was the top riser on the S&P 500, up 29.8% to $87.96 following upbeat earnings. Read more.
On the losing side, the biggest faller was Alexion Pharm Inc (NASDAQ:ALXN), down 10.5% to $113.60 – and defying the herd view that pharma stocks can’t have a bad day under a Trump administration.
But the stock has had a headache to deal with. On Wednesday, share trading was halted after the company said it was delaying the filing of its third-quarter report due to an ongoing probe into certain sales practices following allegations by a former employee.
Hitting the highest notes on the S&P 400 was Esterline Technologies Corp (NYSE:ESL), while the top riser on the S&P 600 was jobs website operator Dice Holdings (NYSE:DHX), up 13% to $6.50.
As the surprise election of Trump as US President resulted in a sectoral shake-out among stocks, agricultural commodities traders have been on the receiving end of a poor harvest.
Shares in Archer Daniels Midland (NYSE:ADM) and Bunge (NYSE:BG) were down sharply since Trump’s victory on Wednesday morning.
ADM’s shares are down 13% since the start of Wednesday trading and on Friday was down 7.6% at $41.73 while Bunge is down over 8% in the same period, and 4.5% of its lost on Friday, down to $64.30.
Let’s all hope next week sees a bit of a correction to some of the sharp stock moves.
Open
US top stocks opened softer on Friday as markets paused after this week’s euphoria about a pro-business agenda from President-elect Donald Trump, but smaller caps just soldiered on higher.
The S&P 500 market bellwether was down 0.5% at 2157 and led south by retailer Michael Kors Holdings Ltd (NYSE:KORS), down 9% to $47.10 after releasing its second-quarter 2017 earnings results which although were forecast-beating earnings of $0.95 per share and revenue of $1.088bn nevertheless were accompanied by a bleak outlook.
That contrasted with retailing names like Macy’s and Kohl’s on Thursday. Indeed Kohl’s (NYSE:KSS) was still a third top riser on Friday, up 3.5% to $52.73.
The top riser was PC graphics firm Nvidia Corp (NASDAQ:NVDA) up a stonking 23.7% to $83.85 after Street-surpassing quarterly earnings overnight.
But Michael Koors was not the only attire retailing name struggling. JC Penney (NYSE:JCP) had a rocky start to the session too. Reporting its earnings, the company said its women’s apparel division took a hit from unusually warm temperatures. The firm said it is looking to reverse falling sales by focusing on less weather-sensitive products like appliances, beauty and jewelry during the all-important upcoming holiday season.
But unlike rival Macy’s, which reported strengthening clothing sales in the past quarter, Dallas-based JC Penney said its women’s clothing business in particular was a disappointment in the past quarter, with like-for-like sales and overall revenue falling compared to the year-ago period.
JC Penney shares were down 2.2% at $8.62.
But if equity markets have had a rollercoaster ride this week in the wake of Trump’s electoral victory it was perhaps put in the shade by the sell-off in US Treasuries – at least there is was pretty much a one-way bet.
With short-dated rate-sensitive 2-year T-Note yields only rising 10 basis points, while 10-year and longer maturities have seen more than 40 bps added, there has been a sharp steepening of the yield curve and one that bankers are growing worried about.
The ferocity of the sell-off in US government bonds this week may have thoroughly wrong-footed investors who have positioned for “lower for longer” rates – a potentially “destabilising” development for broader markets, Goldman Sachs has warned.
Both growth and inflation are expected to accelerate further if Trump makes good on his vows to cut taxes and rapidly increase infrastructure spending.
Federal Reserve Vice Chairman Stanley Fischer on Friday stopped short of commenting directly on this week’s election results, but said the case for removing accommodation is "quite strong" while interest rates will plateau at a level that is lower than normal.
Fischer, a hawk, number two to chairman Janet Yellen and a voting member of the Fed's policy-setting committee, spoke in Santiago, Chile at the annual conference of the Central Bank of Chile on US monetary policy and the global economy.
He expects US rates to rise gradually, and said the Fed is close to achieving its dual mandate. The Fed's goal is to return to 2% longer-run inflation and to maximise employment.
The S&P Midcap 400 index, defied gravity and rose by 0.4% to 1553 on Friday. It was led higher by Esterline Technologies Corp (NYSE:ESL), up 10.6% to $87.30 after reporting buoyant full-year earnings earlier.
The small-caps again proved the most resilient. After a near 2% gain on Thursday, the S&P Smallcap 600 was up 1% at 769 on Friday and led by Celadon Group (NYSE:CGI), up 7.3% at $6.60 on technical factors.
Pre-Open
US stocks are expected to ease on Friday as business reform euphoria following the shock presidential victory for Donald Trump wanes, most interesting will be whether or not smaller stocks have a hard landing after huge S&P 600 gains on Thursday.
Market volatility has seen a record high close by the Dow Jones Industrial Average on Thursday so anything is technically possible in this roller coaster ride of a week for the bourse. The S&P 600 closed up 1.9% at 762 on Thursday – one of its best single-day rises this year.
US stocks had a mixed reaction on Thursday, as investors sought to digest how the Trump administration would impact different industries. While financial stocks pushed the Dow Jones Industrial Average to a record close of 18807.88, declines in technology stocks sent down the Nasdaq Composite index by 0.8% - while Silicon Valley demanded a "Calexit" breakaway for California, Brexit-style.
The S&P 500 futures indicate a fall of up to 0.5% this session.
Commodity stocks might fare well on Friday, as copper was joined by iron ore among materials rallying.
Boosted by a wave of speculative buying, the steel-making ingredient is set for its biggest weekly gain since price assessments began in 2008.
Among individual stocks, Nvidia Corporation (NASDAQ:NVDA) which makes graphics cards for computers reported better-than-expected earnings after the bell on Thursday. Its shares were up 17.8% at $79.81 pre-market.
Similarly, Nordstrom Inc (NYSE:JWN) shares were higher on earnings although the gains were a more subdued 3.7% at $58.10 pre-market.
Family entertainments giant Walt Disney Co (NYSE:DIS) offered some happy clappy as it issued a bright outlook update and its shares were up 2.6% at $97.45.
Federal Reserve vice chair Stanley Fischer is speaking Friday. It's unlikely he'll comment on the US election, but he may give some guidance on the possibility of a December rate hike.
Meanwhile, the University of Michigan consumer sentiment report for November is set for release at 1500 GMT.