U.S. markets and stock exchange traded funds rebounded on Friday as strong quarterly earnings from Apple and Visa helped fuel the positive sentiment to help close out a volatile week.
On Friday, the Invesco S&P 500 Equal Weight ETF (RSP), which follows the S&P 500 Equal Weight Index (EWI), rose 0.4%. Meanwhile, the S&P 500 was up 1.1%, the Dow Jones Industrial Average was 0.7% higher, and the Nasdaq Composite gained 1.7%.
Apple Inc. revealed stellar fourth quarter results and teased its metaverse outlook while Visa also beat quarterly estimates on a recovery in international travel and e-commerce, Reuters reports.
“The Apple growth story is plowing straight ahead and supply chain improvements potentially on the horizon is a major bullish data point not just for Apple, but the entire tech sector to digest this morning,” Wedbush Securities analyst Daniel Ives told Reuters.
Nevertheless, traders remain wary of any gains as uncertainty continues to weigh on sentiment.
“It looks like we’re in for a bumpy ride and whether or not we close up on the plus side is irrelevant because the market volatility is likely to continue,” Peter Cardillo, chief market economist at Spartan Capital Securities, told Reuters. “If we begin to see inflation moderate a bit, then the yields may actually begin to work their way lower. And so that means that perhaps an overly aggressive move by the Fed may not be necessary now.”
Updated economic data on Friday revealed that the core personal consumption expenditure price index, the Federal Reserve’s preferred gauge for inflation, was up 0.5% in December, mirroring expectations.
The Federal Reserve remains an uncertainty. While the central bank has stated its intent to hike interest rates, the markets are still unclear about how many rate hikes are in store and how aggressively the Fed will tighten its monetary policy.
“Cheap money is like a comfort blanket for investors and for markets,” Jane Foley, senior foreign-exchange strategist at Rabobank, told the Wall Street Journal. “Almost inevitably, you start to withdraw some of that cheap money and you’re going to have more volatility in the markets.”
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