US close: Stocks end higher as GDP data keep hopes of soft landing alive
By Alexander Bueso
Date: Friday 27 Jan 2023
(Sharecast News) - Wall Street's main market indices put in solid gains on Thursday following the release of a raft of data that many economists said kept the hopes of a soft landing alive.
"As momentum fades, we expect the U.S. to slip into a mild recession later this year, although risks are tilted toward a 'soft landing' given the resilience of the labor market," said Mickey Levy, economist at Berenberg Capital Markets.
Yet the details of the various economic reports arguably revealed slightly weaker than expected levels of activity, with the possible exception of the jobless claims figures.
Against that backdrop, the Dow Jones Industrials climbed 0.61% to 33,949.41, the S&P 500 was up by 1.10% to 4,060.43 and the Nasdaq Composite was ahead by 1.76% to 11,512.41.
Worth noting, boosting the latter was an 11% pop in shares of electric vehicle maker Tesla.
US gross domestic product expanded at an annualised rate of 2.9% over the last three months of 2022.
That was better than the 2.8% gain anticipated by economists.
But inventory building made a 1.5 percentage point contribution to GDP growth with foreign trade adding a further 0.6 points and neither were sustainable, said Ian Shepherdson at Pantheon Macroeconomics.
"We think final demand growth will be minimal in the next couple quarters, with headline GDP falling. Whether this eventually is declared a recession will depend on what happens to employment and incomes, but they are both likely to soften markedly, at least," he explained.
"And note that the near-stalling in final demand does not reflect the full impact of the Fed's tightening, so these data reinforce our view that further rate hikes are unnecessary."
The initial jobless claims figures meanwhile did surprise again to the downside, but because analysts overlooked the seasonal patterns and layoff announcements "point unambiguously to much higher claims in Q2," Shepherdson added.
Durable goods orders literally soared in December, but only due to rocketing orders for civilian aircraft which were notoriously volatile.
New home sales edged past forecasts during the same month, but that was offset by downwards revisions to the numbers for the preceding three months.
Perhaps key among all the noise, Shepherdson noted that the price data contained in Thursday's GDP report was consistent with an in-line reading for the key personal consumption expenditures price deflator data due out the next day.
Dow Jones - Risers
Salesforce.Com Inc. (CRM) $165.09 5.71%
Chevron Corp. (CVX) $187.79 4.86%
Microsoft Corp. (MSFT) $248.00 3.07%
Goldman Sachs Group Inc. (GS) $354.72 1.53%
Apple Inc. (AAPL) $143.96 1.48%
Walt Disney Co. (DIS) $109.70 1.46%
Caterpillar Inc. (CAT) $262.05 1.42%
Intel Corp. (INTC) $30.09 1.31%
Cisco Systems Inc. (CSCO) $48.34 0.75%
Travelers Company Inc. (TRV) $192.17 0.72%
Dow Jones - Fallers
International Business Machines Corporation (CDI) (IBM) $134.45 -4.48%
Merck & Co. Inc. (MRK) $106.87 -1.58%
Home Depot Inc. (HD) $313.45 -1.09%
Amgen Inc. (AMGN) $254.88 -0.65%
American Express Co. (AXP) $155.88 -0.57%
Procter & Gamble Co. (PG) $141.06 -0.40%
Johnson & Johnson (JNJ) $168.92 -0.37%
Coca-Cola Co. (KO) $60.78 -0.20%
Verizon Communications Inc. (VZ) $40.27 -0.15%
Walmart Inc. (WMT) $142.21 -0.09%
S&P 500 - Risers
Seagate Technology Plc (STX) $69.01 10.86%
United Rentals Inc. (URI) $431.48 9.94%
Nucor Corp. (NUE) $169.92 8.39%
Packaging Corp. Amer (PKG) $138.62 7.33%
Foot Locker Inc. (FL) $43.24 6.36%
Tractor Supply Company (TSCO) $226.72 6.03%
Western Digital Corp. (WDC) $43.76 5.93%
Salesforce.Com Inc. (CRM) $165.09 5.71%
Nektar Therapeutics (NKTR) $2.45 5.58%
Chevron Corp. (CVX) $187.79 4.86%
S&P 500 - Fallers
Sherwin-Williams Co. (SHW) $225.13 -8.92%
Bread Financial Holdings, Inc. (BFH) $40.23 -5.83%
McCormick & Co. (MKC) $73.50 -5.80%
International Business Machines Corporation (CDI) (IBM) $134.45 -4.48%
Northrop Grumman Corp. (NOC) $443.04 -4.28%
Raymond James Fin Corp. (RJF) $113.38 -4.00%
Southwest Airlines Co. (LUV) $35.74 -3.17%
CenturyLink Inc. (LUMN) $5.14 -3.02%
CSX Corp. (CSX) $30.15 -2.90%
Smith A O Corp. (AOS) $58.95 -2.76%
Nasdaq 100 - Risers
Qurate Retail Inc. (QRTEA) $2.58 13.66%
Tesla Inc (TSLA) $160.27 10.97%
Seagate Technology Plc (STX) $69.01 10.86%
Western Digital Corp. (WDC) $43.76 5.93%
Mercadolibre Inc. (MELI) $1,188.58 5.12%
Wynn Resorts Ltd. (WYNN) $102.85 4.32%
Align Technology Inc. (ALGN) $262.95 4.31%
Meta Platforms Inc. (META) $147.30 4.10%
Baidu Inc. (BIDU) $138.43 3.13%
Microsoft Corp. (MSFT) $248.00 3.07%
Nasdaq 100 - Fallers
CSX Corp. (CSX) $30.15 -2.90%
Dish Network Corp. (DISH) $14.41 -1.84%
Automatic Data Processing Inc. (ADP) $225.43 -1.13%
Netflix Inc. (NFLX) $364.87 -0.84%
Mondelez International Inc. (MDLZ) $64.52 -0.74%
Kraft Heinz Co. (KHC) $39.66 -0.73%
Amgen Inc. (AMGN) $254.88 -0.65%
Texas Instruments Inc (TXN) $174.10 -0.54%
Gilead Sciences Inc. (GILD) $83.63 -0.54%
Vodafone Group Plc ADS (VOD) $11.46 -0.52%
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