Stock futures were higher early Friday as the final day of trading in an eventful first quarter begins.
Around 8:50 a.m. ET, S&P 500 futures were up about 0.3%, while Dow futures were up 0.2% and Nasdaq futures were up a more modest 0.1%.
Futures rose Friday morning afterwards Inflation data showed a further slowdown in the personal consumption expenditure (PCE) index, the Fed’s preferred measure of inflation.
In February, “core” PCE, which excludes more volatile food and energy costs, rose 0.3% mom and 4.6% yoy, underperforming the annual rise at 4.7% was in line with Wall Street’s expectations.
A slowdown in inflation could ease the pressure the Federal Reserve is feeling to continue its rate-hiking campaign, which Fed officials hinted earlier this week might taper off this spring amid persistently excessive inflation and a banking crisis showing signs of abating shows, will probably be continued.
Friday will serve as the final trading session in a quarter that Yahoo Finance’s Jared Blikre noted has highlighted some market trends from the past few days, most notably the outperformance of technology stocks.
As of Thursday’s close, the Nasdaq 100 is up more than 18% so far this year, with names like Apple (AAPL) and Amazon (AMZN) up more than 20% this year, while Tesla (TSLA) and Meta Platforms ( META) are up more than 60% so far this year.
In a note to clients issued Thursday, Fundstrat’s Tom Lee stressed that bull markets typically begin with back-to-back quarterly gains for the S&P 500, which is confirmed at Friday’s close after the S&P 500 rose 7% in the fourth quarter of 2022.
“The first quarter of 2023 comes to an end on Friday and despite a devastating banking crisis, the S&P is up +5.5% and +2.3% in March,” Lee wrote.
“Many skeptics (anecdotally the majority of our clients) will likely sniff these gains as they are just noise until the bear market asserts itself again. But for reasons outlined below, we believe 1Q23 gains are now solidifying that “bears are now trapped”. ‘”
In addition to the two straight quarterly gains, Lee argues that the banking crisis appears to be more of an anomaly than a protracted event, CFTC data shows traders remain net short in the market, and April was the S&P 500’s best month in recent years 20-year and 50-year periods.
“Bottom line: It’s the bears who are trapped and could fuel more gains in April,” Lee wrote.
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Source : finance.yahoo.com