U.S. equities were mixed on Friday as the S&P 500 continued to hover below its record high from February. Electric car company Tesla continued to climb after two Wall Street firms upgraded the stock. The Commerce Department said retail sales rose for the third consecutive month, though the increase was smaller-than-expected when accounting for automobiles.
Behind Friday's market:
- The Dow gained 0.12% for its second positive day in three
- The Dow gained 1.81% for the week for its second straight weekly gain
- The Dow is 5.54% below its intraday all-time high of 29,568.57 from Feb. 12
- The S&P 500 closed down 0.02% for its third negative day in four
- The S&P closed up 0.64% for the week for its third straight weekly gain
- The S&P is 0.61% below its intraday all-time high of 3,393.52 from Feb. 19
- The Nasdaq closed down 0.21% for its first negative day in three
- The Nasdaq closed up 0.08% for the week in its third straight positive week
- The Nasdaq is 0.96% below its intraday all-time high of 11,126.04 from Aug. 7
- The Russell 2,000 small caps closed down 0.12% for its third negative day in four
- For the week the Russell 2,000 gained 0.55% for its third straight weekly gain
- The Russell 2,000 is 8% below its 52-week high of 1,715.08. - Gina Francolla
Fed's Kashkari again calls for full lockdown to fight virus
Minneapolis Federal Reserve President Neel Kashkari renewed his call for an economic shutdown, telling CNBC on Friday that it's the only hope for arresting the Covid-19 spread and getting the economy back on track. In a recent op-ed for the New York Times, Kashkari and economics professor Michael T. Osterholm of the University of Minnesota argued that the country should do a full lockdown for up to six weeks. "We blew it the first time ... we should do it right this time," the central bank official said on "Closing Bell." Kashkari added that the coronavirus strain is "raging out of control," posing health risks and limiting Americans' ability to engage in activities like watching college football. "What kind of a recovery is that?" he said. — Jeff Cox
Stocks end the session mixed, but all major averages post gains for the week
Stocks finished Friday's session mixed with the Dow gaining 34 points, or 0.12%, while the Nasdaq Composite and S&P 500 fell 0.21% and 0.02%, respectively. For the week, however, all three indexes finished higher. - Pippa Stevens
Why this recession has been different than any other
Stocks closing to record highs coupled with strong retail spending and a burgeoning housing market don't usually make for much of a recession, but these are not ordinary times.
The recession that started in February is unique both in the speed of its decline and the forcefulness of the policy response, Wall Street veterans tell CNBC. "I can't think of any other recession that essentially is going from a depression-like environment to a wartime boom in the matter of two quarters," said Jim Paulsen, chief investment strategist at the Leuthold Group.
In fact, Paulsen and Moody's Analytics economist Mark Zandi think the recession is already over. But economist Steve Blitz at TS Lombard warned that the danger has not passed. "We've seen the two negative quarters that the NBER uses to define a recession. But the real recession has yet to emerge," Blitz said. —Jeff Cox
Stocks hitting new highs
A number of stocks rose to new all-time highs during Friday's session, including:
- Best Buy trading at all-time high levels since its IPO in 1985
- Chipotle Mexican Grill trading at all-time high levels back to its IPO in Jan. 2006
- Target trading at all-time high levels back to its IPO in Oct. 1967
- Applied Materials trading at all-time high levels back to its IPO in Oct. 1972. - Chris Hayes
U.S. and China's review of phase one trade deal reportedly delayed
A review of the phase-one trade deal between the U.S. and China has been pushed back due to scheduling issues, Reuters reported on Friday, citing sources familiar with the plans. Top U.S. and Chinese trade officials — U.S. Trade Representative Robert Lighthizer and Chinese Vice Premier Liu He — initially were scheduled to hold a video call on Saturday to review progress on the deal the two sides reached in January.
Recently, tensions between the two countries have escalated. The Trump administration has imposed sanctions on a few Chinese officials for their involvement in the new national security law that Beijing imposed on Hong Kong, while banning transactions with popular Chinese app TikTok. — Yun Li
Markets at midday: Stocks are little changed to end the week
The major averages traded along the flat line midday Friday as the S&P 500 tried once again to make a run for its all-time high. The S&P 500 was up 0.1% along with the Dow Jones Industrial Average. The Nasdaq Composite slipped 0.2%. — Fred Imbert
Nasdaq lags as Big Tech loses ground
The Nasdaq Composite gave up its early gains to fall behind the S&P 500 and Dow for the day. Large tech stocks weighed on the index, with Apple, Amazon and Microsoft all trading in the red. The Nasdaq was down roughly 0.3%, while the other two indexes traded near the flat line. — Jesse Pound
Stimulus stalemate could drag on for weeks with Senate in recess
Negotiations towards the next coronavirus relief package remain at a standstill, and the stalemate could drag on for weeks. The Senate is in recess and will not hold votes until Sept. 8, while the House had already left Washington for all of August. The two sides will also hold their respective presidential nominating conventions over the next two weeks.
No stimulus talks are scheduled at this point. House Speaker Nancy Pelosi has said she will not restart discussions until Republicans increase their aid offer by $1 trillion, which the GOP won't compromise. — Yun Li
Here are Friday’s biggest analyst calls of the day: Tesla, CrowdStrike, Walmart, Marriott & more
- Jefferies upgraded Marriott to buy from hold.
- Oppenheimer upgraded Tencent Music Entertainment to outperform from perform.
- Evercore ISI upgraded Tapestry to outperform from in line.
- Morgan Stanley upgraded Tesla to equal weight from underweight.
- DA Davidson initiated Best Buy, Lowe's, Target, Walmart, and Dick's as buy.
- UBS initiated CrowdStrike as buy.
- Bank of America upgraded Tesla to equal weight from underweight.
Pro Subscribers can read more here. — Michael Bloom
Dow, S&P 500 open lower as cyclical names lag
The Dow Jones Industrial Average fell 100 points at the start of Friday's session, with Apple, UnitedHealth and Home Depot leading the blue-chip laggards. The S&P 500, which lost 0.2% at the open, slipped further from its record highs as economically sensitive sectors like energy and financials came under pressure heading into the weekend. Airline stocks Southwest, Delta, United and American lost 0.75%, 0.9%, 1.2% and 1.4%, respectively.
The Nasdaq Composite, the relative outperformer, lost 0.15%. — Thomas Franck
Retail sales rise 1.2% in July, third straight monthly increase despite virus
U.S. households boosted their spending at retail locations in July, the third straight month of increases despite a concurrent acceleration in new coronavirus cases, the Commerce Department reported Friday. Retail sales rose 1.2% for the month, falling short of the expected increase of 2.3% expected by economists surveyed by Dow Jones. Excluding automobile sales, the gain was a better-than-expected 1.9%.
The numbers did represent a deceleration from June figures, which were revised higher to show that retail sales saw an 8.4% surge. — Thomas Franck
Economic data likely to show boost in spending in July
Retail sales data for July will be released at 8:30 a.m. ET on Friday, and economists are expecting the reading to show a rise in year-over-year spending. Estimates compiled by Dow Jones call for a 2.3% jump in spending last month. This would, however, represent a slowdown from June's 7.5% increase due to states imposing restrictions amid an upswing in Covid-19 cases. — Pippa Stevens
Tesla shares jump after analyst Morgan Stanley and Bank of America upgrades
Shares of Tesla rose more than 3% in the premarket after analysts at Morgan Stanley and Bank of America upgraded the electric car maker.
Morgan Stanley's Adam Jonas upgraded the electric car maker's stock to equal weight from underweight, citing the prospect of Tesla building an electric-vehicle supply business. The analyst also hiked his price target on Tesla to $1,360 per share from $1,050 per share. The forecast implies a 12-month downside from the stock's closing price of $1,621 per share.
"We see scope for Tesla to be both manufacturer and consumer as well as a company that endeavors to make rapid product improvements in the entire EV stack that we believe can disrupt the broader EV battery industry with potential to grow the pie itself," Jonas said.
Bank of America's John Murphy also raised his Tesla rating to neutral from underperform and hiked his price target to $1,750 per share from $800 per share. That target implies an upside of 8% over the next 12 months.
"Musk's leadership, a compelling brand, and improved execution are driving an ever-increasing stock price. This is direct evidence that the company has unfettered access to low-cost capital, which remains a key advantage," Murphy said. "It is important to recognize that the higher the upward spiral of TSLA's stock goes, the cheaper capital becomes to fund growth, which is then rewarded by investors with a higher stock price." — Fred Imbert, Michael Bloom
Stock futures under pressure as S&P 500 struggles to break above February high
U.S. stock futures were under pressure on Friday morning as the S&P 500 continues its struggles to break into record territory. Dow Jones Industrial Average futures dipped more than 100 points, or 0.4%. S&P 500 futures slipped 0.2% and Nasdaq 100 futures were up marginally. Airline stocks such as Delta and American fell in premarket trading along with cruise operators Carnival and Royal Caribbean. Entering Friday's session, the S&P 500 was just 0.6% below an all-time high set on Feb. 19. The broader market index has traded above its record closing high several times this week, but has been unable to close above that mark. — Fred Imbert