U.S. stocks rose on Friday to post gains across the board, ending the last full week of trading in 2022.
As the closing bell rang on Wall Street, the S&P 500 (^GSPC) was up 0.6%, the Dow Jones Industrial Average (^DJI) was up 0.5%, while the tech-heavy Nasdaq Composite (^IXIC) was up 0. 2% up.
US equity and bond markets will remain closed on Monday 26th December for the Christmas holiday.
With Friday’s move, the S&P 500 and Dow managed to stave off losses for the week, while the Nasdaq fell about 1.5%. Nonetheless, the markets are about to end the worst year for stock markets since 2008 when the trading year closes on Friday, December 30th.
Oil prices rose on Friday, heading for a big weekly gain as investors anticipated a drop in Russian crude supply.
WTI Crude Oil rose 2.77% to $79.64 a barrel on Friday. For the week, WTI was up more than 6% after hitting lows for the year earlier this month.
US Treasury yields edged higher, while the US dollar index fell against a basket of other currencies.
Economic data flow has been significant this week and Friday was no exception.
The PCE price index — the Fed’s preferred measure of inflation — released Friday morning showed prices rose 5.5% from November last year and 0.1% from the previous month, in line with consensus estimates from economists polled by Bloomberg . The figure marked a slowdown from October’s readings of 6.1% and 0.3% for annual and monthly inflation, respectively.
Core PCE, which excludes the volatile food and energy components, rose 4.7% yoy and 0.2% mom.
Meanwhile, personal spending in November stagnated at its weakest level since July.
“The Federal Reserve’s preferred measure of inflation continues to fall, which is good news for its main target, but unfortunately for the market, this is happening at the same time as consumers continue to cut spending,” the Independent’s chief investment said Advisor Alliance Officer Chris Zaccarelli said in a note.
The story goes on
Elsewhere in economic data, US consumer sentiment towards the economy improved in December. The University of Michigan said on Friday that its consumer sentiment index rose to 59.7 this month from 56.8 in November, up slightly from the preliminary reading of 59.1 mid-month. And November new home sales rose 5.8% mom from October.
NEW YORK, NEW YORK – DECEMBER 21: People walk past the New York Stock Exchange during afternoon trading. (Photo by Michael M. Santiago/Getty Images)
Following the Fed’s final 2022 policy decision last week, strategists pointed out that the most surprising data point among officials’ economic forecasts was an upward revision of their core PCE expectations to 3.5% by the end of 2023 from 3.1%. This indicated that many Federal Reserve analysts need to keep interest rates at elevated levels through 2023.
“We expect the Fed to revise downwards as early as March, although progress will be slow initially; Policymakers seem scarred by the experience of the past year and a half and will want to be sure they don’t cut their numbers prematurely,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics, in a note. “Markets don’t wait.”
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Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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