US stocks closed higher on Friday, but little changed following Donald Trump’s first speech as President.
A new era has dawned, surely, as Trump is the first US President never to have held public office before, and the parade of his cabinet appointees demonstrates a profound difference in experience and interests from outgoing President Barack Obama’s team.
Perhaps not the best omen, rain began to fall the moment the 45th head of state started delivering his first, and somewhat threadbare and uninspiring speech as President of the United States on Friday. But given the reaction of markets, it is safe to assume investors were not expecting much from the day and for the most part didn’t give up bourse value either.
The only ticker which pared gains was the tech-heavy Nasdaq Composite, which ended up 0.3% at 5,555 but about 20 points off its intraday high struck before Trump attended his inauguration on Capitol Hill.
The S&P 500 ended up 0.3% at 2271 and led by Skyworks Solutions (NASDAQ:SWKS) up 13.1% to $88.70, while the Dow Jones Industrial Average made a spirited last-minute dash higher, to advance by 0.5% to 19,827. The Dow’s top riser was a recent Trump convert, IBM, whose chief helped orchestrate a thawing of relations between Trump and Silicon Valley and led to a historic meeting of the industry with the future President in New York in December.
International Business Machines (NYSE:IBM) closed up 2.3% at $170.64. But its reasons for gaining were mostly to do with IBM beating on fourth quarter earnings and offering a positive outlook on 2017.
Despite striking a patriotic tone – and professing his preference for companies that “buy American” and “hire American” – Trump gave little indication yet again on what policy specifics Americans might expect for the next four years.
Analysts say the markets are likely to continue trading sideways until more details emerge from the Trump team on the policy front.
The S&P Midcap 400 closed up 0.5% at 1675 and led by oil group Noble Corp (NYSE:NE), lapping up oil price gains. The US oil benchmark WTI closed up 2% at $52.42.
The S&P Smallcap 600 added 0.4% to 827 and led by Ciber Inc (NYSE:CBR) up 12.6% to $0.70.
Early trading
US stocks made a spirited oil-fuelled jump on Friday ahead of Donald Trump’s inauguration ceremony in Washington, but it wasn’t enough to hit any fresh record highs.
The S&P 500 market bellwether was up 0.4% at 2273 and led by Skyworks Solutions (NASDAQ:SWKS), up 12% at $87.87 after the semiconductors and radio tech company reported first-quarter fiscal 2017 non-GAAP earnings of $1.61 per share, which increased 0.6% from the year-ago quarter and 9.5% on a sequential basis - the figures beat management’s guidance by 3 cents.
The Nasdaq Composite was up 0.4% at 5559 and the Dow Jones Industrial Average up 0.5%, or 90 points, at 19,822. Earlier, it marked an intraday high of 19,843 and no threat to breaching the 20,000 milestone.
The S&P Midcap 400 was up 0.6% at 1677 and led by Noble Corp (NYSE:NE) up 81% at $7.60 and lapping up gains by oil prices. The WTI was up 3% at $52.88.
The S&P Smallcap 600 was up 0.6% at 828 and led by Cross Country Healthcare (NASDAQ:CCRN) up 4.3% at $14.79.
Pre-Open
US stocks are set to open higher on Friday, in time to cheer on the handover of the Administration to President Donald Trump, although the Dow, which has had to longest losing streak since November, is apprehensively looking up.
The S&P 500 market bellwether is indicated up 0.2% while the tech-heavy Nasdaq Composite is heading 0.3% higher.
The Dow Jones Industrial Average is set to open 0.1% higher.
Helping support tickers, oil prices were higher. The US oil benchmark West Texas Intermediate was up 1.6% at $52.17.
Trump is set to be sworn in as the 45th president of the United States, taking the oath of office around noon (1700 GMT).
Although the inauguration is a celebration, not a repository for policy espousals, banks and other sectors will already be anticipating changes that favour their sectors. For example, talk that the Volcker Rule, the centerpiece of the outgoing President Barack Obama’s financial and banking regulation reforms of 2009, may be scrapped or severely choked by Trump.
Since his election, Trump has shown a knack for moving markets. Investors have pushed US and global stock markets higher in response to his pro-business rhetoric.
The Dow Jones industrial average has surged 7.6% since the election in November and even traded near 20,000 points at year end before easing back down. The S&P 500 advanced 5.8% while the Nasdaq added 6.7% over the same period.
But the Republican has also introduced a heavy dose of uncertainty to markets. Trump has made a habit of targeting and calling out specific companies on Twitter. Advisers at the White House might be calling on his to moderate his future tweets, although whether the “own-man” Trump will heed, just like his reflationary economic ambitions, remains to be seen.
Either way, stock futures suggest investors want more detail from Trump before they're ready to push shares even higher. The major indexes are holding steady right now.
Stock specific, General Electric (NYSE:GE), the largest US manufacturing group, has reported earnings in line with expectations, as a slump in profits from its operations serving the oil and gas industry offset good performances from power generation equipment.
Underlying earnings per share were 46 cents for the fourth quarter of 2016, down 12% from the equivalent period of 2015 but in line with the average of analysts’ expectations.
GE shares were down 1.8% at $30.64 pre-market, and likely to act as a drag on tickers, especially the Dow.
Meanwhile, Procter & Gamble Co (NYSE:PG) is rising by 2.9% to $87.15 pre-market, after it raised its “organic” sales guidance for its full fiscal year on Friday , as the maker of Pampers and Gillette shows further signs it is emerging from its years of cost cutting towards top-line growth.
The consumer goods company now expects sales excluding the negative impact of foreign exchange and divestitures to increase 2-3%, compared with an earlier forecast of 2%. Shares were up 1.9% at $86.30 in pre-market trading in New York. It is still expecting core earnings per share growth of “mid-single digits”.
In its fiscal second-quarter, which ended in December, the company said sales were $16.9bn, unchanged from the same period a year earlier and beating analysts’ forecasts for sales of $16.8bn. Organic sales rose 2%, thanks to higher volumes.
Shares in Bristol-Myers Squibb (NYSE:BMY) are falling by 8.5% to $50.77 pre-market after the firm announced it wouldn't pursue "an accelerated regulatory pathway" for a lung cancer treatment it had been developing.
This has helped shares in competitor Merck & Co., Inc. (NYSE:MRK) pop by about 3.3% to $62.33 pre-market.