Post-Taper, Markets Have Green Friday
Today's financial recap and tomorrow's financial outlook.
The final estimate of third-quarter GDP was 4.1%, significantly higher than the 3.6% consensus forecast. Personal consumption also impressed, rising 2.0%, easily ahead of the 1.4% consensus. The GDP deflator was in-line at 2.0%.
The news was good enough to send the bears running for cover, with all S&P sectors comfortably in the green; however, emerging markets stocks were down, taking their cue from weakness in Chinese names.
In a reversal from the past two days, the small-cap Russell 2000 (INDEXRUSSELL:RUT) showed massive outperformance, up 1.9%, good enough to make its own all-time high. We also saw a new record for the Dow Jones Industrial Average (INDEXDJX:.DJI), and a new post-bubble record for the Nasdaq Composite (INDEXNASDAQ:.IXIC).
Software maker Red Hat (NYSE:RHT) shined on Friday with a 14.5% rally, following a very impressive third-quarter earnings report Thursday afternoon. Raymond James and UBS both upgraded the stock this morning.
Shares of BlackBerry (NASDAQ:BBRY) rose 15.5%, despite reporting a third-quarter loss and revenues that were well below analysts' expectations. In conjunction with its earnings report, the company announced a five-year partnership with electronics manufacturer Foxxconn to develop new smartphone products, which is a signal that BlackBerry will be less dependent on manufacturing low-margin hardware. New CEO John Chen said the deal would help the company turn cash flow positive.
Nike (NKE:NYSE) had a rough day, however, falling 1.2% despite a solid second-quarter earnings report. Investors were underwhelmed with the company's forward outlook, which is being dragged down by expense pressures. Heading into the quarter, the stock was up 52% year-to-date, so expectations may have gotten a bit ahead of themselves.
Over in fixed income, the 10-year US Treasury yield is back down to 2.89% after an early morning rally that nearly hit the 3% mark.
Tomorrow's Financial Outlook
Given that we're heading into a holiday week, it's likely to be a slow day in terms of news, and volumes should be low.
However, there is some economic data on the calendar. At 8:30 a.m. EST, we will receive November personal income, personal spending, and PCE prices. And at 9:55 a.m., the December University of Michigan consumer sentiment survey will be released.
There are no major earnings reports due.
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