Stock Market Forecast – The Nasdaq Closes higher For the 9th Consecutive Weeks

US stocks moved higher on Friday and with the Nasdaq leading shares higher followed by the S&P 500 index and the Dow Industrials. For the week, the large-cap S&P 500 index settled in the black. The Nasdaq closed higher for a 9^th consecutive week. Sectors where mixed led higher by energy and healthcare. Real-estate and consumer staples bucked the trend.

Stocks got off to a strong start, with futures pointing to 1% open, after Chinese shares rallied by 1.8% following a stronger than expected Chinese PMI report.  The better than expected Chinese number helped lift Apple which closed up nearly 1% for the week. Apple tumbled on soft Chinese sales, and a rebound in the worlds second largest economy would help Apple as well as the broader market. Energy stocks initially moved lower as crude oil tumbled to end the week in the red.  European shares were mixed following soft PMI data.

Amazon Plans to Expand Grocery Offerings

Amazon announced on Friday that the company is planning to open dozens of grocery stores in several US cities, as the retail giant looks to broaden its reach in the food business. The company plans to open its first grocery store in Los Angeles. The new stores would be distinct from the company’s upscale Whole Foods Market brand and carry their own brand.

Manufacturing Slipped

The Institute of Supply Management reported that US manufacturing decelerated in February. The index slipped to 54.2 in February from 56.6 in January. Expectations were for the index to slip to 55.5 in February. The reading was the weakest since November 2016. A decline in new orders, production, employment, and prices all contributed to the decline.

The sub-index of supplier deliveries fell to the lowest level since May 2017, indicating bottlenecks are easing. Order backlogs rose the most in six months. The prices paid index fell to a three-year low of 49.4. The employment gauge fell to 53.3, the lowest in more than two years and the third straight decline.

Confidence Declined

On Friday the University of Michigan reported that consumer sentiment index declined to 93.8 in late February from 95.5 earlier in the month. Expectations were for a 95.8 reading. Analysts had been expecting a larger sentiment rebound, mostly because many believe temporary shock events, such as the shutdown, have only a short-lived impact on sentiment. The report also showed that future expectations of conditions ticked down. Both of these measures, however, are down by more than 5% in the last year. Meanwhile, consumers’ long-term price growth expectations remain near the lowest levels recorded in the past 50 years.

Eurozone PMI’s are Soft

Eurozone reported final manufacturing PMI readings.  The headline came in at 49.3 vs. 49.2 preliminary and still represents a sharp drop from 50.5 in January.  The country breakdown remains worrisome.  Spain fell to 49.9 from 52.4 in January, joining the sub-50 club of Italy which was 47.7 and Germany at 47.6.  France improved to 51.5 from 51.4 preliminaries.