Main markets hold in the green at midday despite unflattering consumer data

Main markets hold in the green at midday despite unflattering consumer data

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12:05pm: Markets remain calm on Friday afternoon  The Dow Jones Industrial Average continued to make gains at the lunch hour bolstered by Thursday’s positivity, higher earnings in the tech sector and continued tailwinds from the $1 trillion dollar infrastructure spending bill approved by the Senate earlier in the week. Since dipping to a multi-year low of 19,173 in March 2020, the index has almost doubled.   At midday the Dow was holding at 35,541 after adding 41 points or 0.12% throughout the morning. The S&P 500 was also on the move during morning trading climbing 3% to 4,464. The two main markets are expected to remain muted for the remainder of the day weighed down by data indicating US consumer sentiment declined to a decade-low in early August. The dramatic decrease in optimism is based on the sobering ratings Americans gave on economic outlook, personal finances, inflation and employment. The depressed consumer outlook may be enough to prompt the Fed to hold back on the speculated policy tapering, however investors will need to wait until next week’s release of the Fed’s policy meeting minutes, as well as the late August annual meeting of central bankers in Jackson Hole, Wyoming, for more clarity. 9.50am: No horror stories (yet!) on Friday the 13th US blue-chips managed to climb higher in early trade on Friday, on course to end the week near record highs in spite of the summer lull, although other major indices were less enthusiastic. After 20 minutes of trading, the Dow Jones Industrial Average, which hit a new record on Thursday, had added 79 points, or 0.2% at 35,579, while the S&P 500 edged up 0.1%, having notched up its 47th all-time closing high of 2021 in the previous session. The Nasdaq Composite, however, remained flat. Craig Erlam, senior market analyst at OANDA Europe commented:  "Stock markets making modest gains once more on Friday, in what is likely to be rather uneventful trade as we make our way into the weekend." "They've been quietly putting together a great run over the last few weeks which has seen them not only deliver strong gains, but hit new records on a daily basis. Good earnings and a strong vaccine program that has enabled looser restrictions, while reducing the threat of them being strictly reimposed later in the year are driving the gains." Erlam added: "Of course, after such a strong run and going into a quieter period, there is the possibility that we could see some profit-taking in the coming weeks. The two weeks before Jackson Hole are looking a little uneventful with just the odd sprinkling of something to satisfy our appetite for more. The Fed minutes next week, for example, will naturally provide plenty of interest. Although we've heard so much from policymakers since the meeting, are we really going to learn that much? "The next couple of weeks could be all about delta and how well China, in particular, and others deal with the spread. China has shown its zero Covid approach has worked before and is not changing course, despite other countries taking a more relaxed approach thanks to the vaccines. "In closing the Meishan terminal at the Ningbo-Zhoushan port - one of the busiest in the world - as a result of one positive case, China has made it perfectly clear that it will take all measures - no matter how seemingly extreme - to contain any breakouts. What that means for the rest of the world is more supply disruptions in the months ahead, which could means more bottlenecks and higher costs. "But as central banks have shown, these are short-term problems with short-term price implications and while they may exacerbate headline inflation data further, they are willing to look beyond them. Although I'm sure from a markets perspective, it will add another layer of uncertainty and unease." 6.50am: Muted start seen on Friday the 13th US stocks look set to end the week on a muted note, albeit still close to new record highs hit on Thursday as investors cheered some benign US data and a blockbuster round of corporate earnings. Futures for the Dow Jones Industrial Average were up less than 0.1% after hitting a record high in the previous session, while futures for the broader S&P 500 were roughly flat with the index having reached its 47th all-time closing peak of 2021 on Thursday. Futures for the tech-laden Nasdaq-100 were also up less than 0.1%. Stocks have moved higher in thin summer trading thanks to solid earnings growth from some of the biggest US companies, even as worries over the coronavirus (COVD-19) Delta variant threaten to dull the economic recovery. One risk is that, after recent benign jobs and inflation data, the Federal Reserve withdraws stimulus measures faster than investors are expecting. The latest data will see the release on Friday of the University of Michigan’s first gauge of consumer sentiment for August, which could show if rising COVID-19 cases have knocked consumer confidence. Five things to watch on Friday: Walt Disney shares were higher ahead of the opening bell after the media giant posted $918 million in profit for its fiscal third quarter compared with a loss of $4.72 billion in the same period last year. Shares in vaccine makers Moderna and Pfizer (NYSE:PFE) rose after the US Food and Drug Administration (FDA) authorized booster shots for certain people with weakened immune systems. Facebook Inc (NASDAQ:FB) may be forced to sell gif creator Giphy after an investigation by the Competition and Markets Authority (CMA). The social media group bought Giphy, which supplies images to Snapchat and Twitter, last year for US$400mln (£290mln). The value of forum website Reddit is expected to rise to over US$10bn after the social media giant unveiled plans to raise over US$700mln in a funding round. On Thursday, the company said the Series F funding round is being led by Fidelity Management and Research Company LLC and also includes some of its other existing investors. Adidas shares rose Friday after the German sporting-goods company said late Thursday it would sell Reebok to Authentic Brands Group for up to 2.1 billion euros, equivalent to around $2.5 billion.

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