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U.S. stock futures headed firmly higher Friday morning, seeting the three main equity gauges up for a strong finish to a record-setting rally that has taken hold in just the third week of the new year, with the weakest annual growth in China in about three decades appearing to have little effect on the bullish mood.
Gains have been mostly aided by an apparent detente between China and the U.S. and corporate quarterly results, which have thus far helped to extend the view that the U.S. will avoid a recession in 2020 and add to a stellar run — if only modestly this year — begun in the last three months of 2019.
How are benchmarks faring?
Futures for the Dow Jones Industrial Average YMH20, +0.22% gained 80 points, or 0.3%, at 29,320, while those for the S&P 500 index ESH20, +0.21% rose 8.35 points, or 0.3%, at 3,324.75, while Nasdaq-100 futures NQH20, +0.34% advanced 34.50 points, or 0.4%, to 9,168.
On Thursday, the Dow DJIA, +0.92% gained 267.42 points, or 0.92%, to 29,297.64, the S&P 500 SPX, +0.84% advanced 27.52 points, or 0.84%, to 3,316.81, while Nasdaq Composite Index COMP, +1.06% added 98.44 points, or 1.06%, to 9,357.13.
For the week, as of Thursday’s close of trade, the Dow and S&P 500 are on pace for their second straight weekly gain. The blue-chip gauge is up 1.6% for the week, on pace for its best weekly advance since Aug. 30. The S&P 500 is headed for a 1.8% gain for the week, which would mark its best return since the week ended Sept. 6. Meanwhile, the Nasdaq is on track for a 1.9% return for the week, which would mark its best return since the period ended Dec. 20 and its sixth weekly gain in a row.
What’s driving the market?
Wall Street is in rally mode, undeterred by China reporting its worst annual growth in three decades of 6.1%. To be sure, the reading was in line with economists’ consensus expectations and many investors saw positive takeaways from the economic report from the world’s second-largest economy.
Indeed, growth picked up in December, marking the fastest pace monthly expansion since last March.
“The data was in line with expectations but there were positive surprises from the monthly indicators, with both industrial output and retail sales beating the forecasts in December and pointing to a possible quickening in growth momentum towards the end of 2019,” wrote Raffi Boyadjian, senior investment analyst at XM Markets, in a daily research note.
“There seems to be no stopping to Wall Street’s rally lately as all three main indexes closed at a record high for yet another day on Thursday as there was nothing to dampen the risk-on mood that’s been driving the markets since early December when the ‘phase one’ deal was announced,” he wrote.
Markets extended gains on Thursday on the back of the signing of the first phase of a Sino-American trade agreement in Washington but also investors got an added jolt after the Senate passed a revised trade deal between the U.S., Mexico and Canada.
Looking ahead, investors are awaiting a report on housing starts and building permits for December at 8:30 a.m. Eastern Time, a reading of industrial production at 9:15 a.m., and at 10 a.m., reports on job openings and consumer sentiment.
Meanwhile, Managing Director Georgieva of the International Monetary Fund is due to speak at the Peterson Institute at 10 a.m.
Which stocks are in focus?
Google-parent Alphabet Inc. GOOG, +0.87% GOOGL, +0.76% just joined the $1 trillion club, closing above that market capitalization mark on Thursday. Shares of the third technology company. Shares of Google’s Class A shares are up 0.7%.
Schlumberger SLB, +1.17% shares were up 2% after the oil-services company reported fourth-quarter profit and revenue that exceeded expectations.
State Street STT, -0.09% was scheduled to report results. The company’s stock was moving 0.2% higher in premarket action.
