The major indexes went on track to end a weeks-long losing streak after a string of more optimistic corporate results offset fears of a steep economic slide, as the major indexes went up Friday morning.
Contracts on the S&P 500 went up. The blue-chip index had a 4% weekly gain as of Thursday's close, which would be its largest since mid-March. The S&P 500 had fallen for the seventh consecutive week prior to its longest losing streak since 2000. Both the Dow and Nasdaq futures gained Friday.
The Federal Reserve preferred gauge of inflation was used by investors as they looked ahead to new economic data later in the morning, including the latest print on core personal consumption expenditures PCE. The Consumer Price Index and Producer Price Index, which was released earlier this month, will show inflationary pressures retreated only modestly in April compared to March. Separate data on personal income and spending is expected to show still solid wage gains and consumption trends across the U.S. economy later this morning.
Over the past several sessions, investors favorably weighed the latest batch of quarterly results and guidance from retailers like Macy's M Nordstrom JWN Dollar General DG and Dollar Tree DLTR These companies have surpassed Wall Street's estimates, which is a result of concerns that the profit pressures recently reported by Walmart WMT Target TGT and Kohl's KSS. Airline and Southwest LUV, including JetBlue JBLU and Southwest LUV, raised their sales guidance for the current quarter, suggesting demand for discretionary travel.
The U.S. consumer is still in great shape. They came into these price hikes with a cushion on their balance sheet. The overall U.S. consumer remains in a very strong position, according to Brent Schutte, chief investment officer at Northwestern Mutual Wealth Management.
He said that the Fed would have to tighten the U.S. economy into a recession because of the big fear that inflation would continue to run away. I think we are starting to wake up to the reality that goods spending has been pulled forward. Inventories have been rebuilt, and goods spending has caused the inflation you are seeing. It's going to roll over as people move over to service sector spending. It may feel like a recession in some parts of the economy, but other parts of the economy are going to do well, Schutte said. Inflation is going to fall, and the Fed is going to go a bit easier. Other strategists have cast doubt on the staying power of gains seen in the market so far this week, especially as inflation has shown few meaningful signs of coming down in a significant way to date.
This is nothing more than a bear bounce in our opinion. Eddie Ghabour, a co-founder and managing partner of Key Advisors Group, told Yahoo Finance Live that when you look at these bounces we've had, there's not a lot of conviction. The data we're getting now that is causing the sell off is first-quarter data. The data coming in the second quarter is going to be worse than the first quarter. We're not going to get that news until July, so I think we're going to have a very treacherous market in the next few months. ET: Stock futures rise as indexes try to log weekly gains.
Emily McCormick is a reporter for Yahoo Finance.