4:11pm: Up for the day but down for the week
The Dow closed Friday up 322 points, 1.1%, at 31,097, the Nasdaq Composite added 99 points, 0.9%, to hit 11,128 and the S&P 500 improved 40 points, 1.1%, to 3,825.
Despite the afternoon reversal of fortune, the benchmarks still posted their fourth losing week of the last five. The S&P 500 endured its worst first half of a year since 1970, but things might not get rosier anytime soon, according to UBS Private Wealth Management managing director Greg Marcus.
“Consensus estimates for 2022 and 2023 remain largely unchanged from the start of the year, even though stock prices have declined considerably since then. Weak guidance could finally force cuts to consensus earnings estimates, which would likely add further downward pressure on stocks,” Marcus said, CNBC reported.
12:04pm: June ISM data misses expectations
At midday, the Dow was down 164 points, 0.5%, to 30,611, the Nasdaq Composite lost 59 points, 0.5%, to 10,969 and the S&P 500 shed 18 points, 0.5%, to 3,767.
Traders reacted to the June US ISM manufacturing index, which dropped to 53.0 from 56.1, below Street expectations of 54.5. New orders heading into contraction territory came in at 49.2 compared to 55.1 previously, where a number below 50 is considered contraction.
"Slowdown worries have already been highlighted this week by the large downward revisions to consumer spending data and the outright contraction in May and today’s manufacturing numbers suggest that weakness is spreading to other parts of the economy," ING Chief International Economist James Knightley wrote Friday. "This won’t deter the Fed from hiking aggressively in the near-term given their clear aim of getting inflation lower. However, it could contribute to less aggressive action later this year and increase the chances that the Fed ends up reversing course and starts cutting interest rates again in summer 2023."
9:55am: Proactive North America headlines:
American Resources says subsidiary scores $2M working capital facility to expand Indiana battery metal production
Hillcrest Energy Technologies ceases oil and gas operations at West Hazel field; completes exit from fossil fuel business
Amazon continues incursion into sports streaming with UK Champions League rights
LexaGene Holdings announces MiQLab Systems sale to veterinary hospital in Wisconsin
GoviEx Uranium eyes completion of Madaouela feasibility study in Q3 this year; updates on positive progress of Mutanga drilling
Naturally Splendid Enterprises says to continue its focus on core plant-based manufacturing business
Kovo HealthTech says it is focusing on evaluating potential acquisition targets
Aion Therapeutic announces intellectual property sale to Apollon Formularies
9.40am: US stocks start in red
US benchmarks started in the red on Friday as traders await more data, which will cast more light on the state of America's economy.
The Dow Jones Industrial Average lost around 15 points to stand at 30.759. The S&P 500 slipped around five at 3,779.
The tech-heavy Nasdaq dropped around 67 points at 10,961.
The latest ISM manufacturing index and construction spending numbers for the USA are set for release at 10am EST. For manufacturing, the expectation is a dip from 56.1 to 54.6.
Yesterday was the final day of the second quarter and the first half of 2022. Notably, in the three months, the S&P 500 fell more than 16% - the index's biggest one-quarter fall since March, 2020.
For the first half, the broader market index dropped 20.6%, which was the largest first-half decline since 1970.
The S&P 500 also dropped bear market territory, down more than 21% from a record high set early January.
6:30am: More falls seen
US stocks are expected to open lower on Friday, starting the second half of the year on a somber note amid growing fears that the US is heading for a recession amid elevated levels of inflation.
The first half of the year was rough for equity markets, with the S&P index recording its worst performance since 1970.
Futures for the Dow Jones Industrial Average were trading 0.3% lower pre-market on Friday, while those for the broader S&P 500 index were down 0.2% and futures for the tech-laden Nasdaq-100 were off 0.3%.
“Fears rattling financial markets show little sign of subsiding, with investors spooked about signs of looming recessions, while inflation stays stubbornly high,” Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown said.
On top of the falls on the S&P 500, the tech-heavy NASDAQ has been wracked by volatility, has plummeted by a third this year and is on track for the biggest ever yearly drop, she noted.
“There are concerns that, just like in the seventies era, demand and inflation won’t fall back easily, and that the Federal Reserve and other central banks will have to step on the accelerator of interest rate hikes to bring red hot prices under control,” Streeter said. “The risk is that could see economies slam into a brick wall of recession, with ripple effects around the world.”
On the economic data front, the ISM manufacturing sector index for June is due at 10.00am ET and will give a snapshot of how the sector is faring amid rising prices and interest rates.
In energy markets, WTI crude oil futures were up 1.8% at $107.66 a barrel while Brent crude futures were 1.9% higher at $111.15.
Contact the author at jon.hopkins@proactiveinvestors.com