January 29, 2023

NASDAQ Composite, S&P 500 Soar on Alphabet, Netflix Gains

Friday saw Wall Street recording uptrends following stable gains in Alphabet and Netflix shares. Nevertheless, S&P 500 and Dow still presented losses over the past seven days, alongside other equity indexes.

Meanwhile, most of the week’s price actions remained volatile and weak. Leading indexes maintained three-day downtrends before Friday’s surge. Thus, oversold technical situations, which triggered some bargain hunters, could have fueled Friday’s rally.

Friday had Dow Jones gaining 1.00% (+330.93) to settle at 33,375.49. Meanwhile, the benchmark S&P 500 closed at 3,972.61, following a 1.89% increase (+73.76), and NASDAQ Composite finalized at 11,140.43 – a 2.66% surge (+288.17).

Google, Netflix Push NASDAQ Composite, S&P 500 Higher

The NASDAQ Composite and S&P 500 saw swift upticks on Friday, receiving support from remarkable performances by Google’s Alphabet and Netflix Inc. NFLX gained 8.5%, though not due to impressive earnings. Instead, the firm surprised market participants by stating that it garnered more subscribers than estimated by 2022 end.

Moreover, the company revealed Reed Hastings, its co-founder, quit the chief executive role. Updates show he left after Netflix began promoting through its streaming services, a notion that Hastings didn’t support.

Meanwhile, Google’s parent company Alphabet gained 5.4% after mimicking Microsoft and Amazon, declaring 12,000 lay-offs.

Salesforce, Goldman Sachs Weigh on DJIA

Dow saw its gains limited by a 2.54% slide in Goldman Sachs’ shares after Wall Street confirmed that the Federal was probing the firm’s consumer business. Also, declines in Salesforce stock helped cap Dow’s upside.

The software company had its shares plummeting by 1%. The dip came after Cowen revised (downgraded) the firm from outperforming ratings to market performance, stating that it should adjust to the new era following years of extensive growth.

Near-Term Outlook

The leading indexes encounter more challenges regardless of Friday’s upside, as the Federal and markets have differing views on how long the central bank will keep hiking rates and at what levels they can stop.

For example, some Federal Reserve speakers (earlier in the week) stated that they saw the terminal rate climbing beyond 5.0%. In contrast, the markets believe the bank will halt rate increases beneath that mark.

Moreover, a chatter on Friday indicated that the central bank would initiate two 25bp increments in 2023 before resorting to a long pause.

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