US stocks drifted higher on Friday to post gains across the board, closing out the last full trading week of 2022.
When the closing bell rang on Wall Street, the S&P 500 (^GSPC) rose 0.6%, the Dow Jones Industrial Average (^ DJI) rose 0.5%, while the Nasdaq Composite (^IXIC) gained 0.2%.
US stock and bond markets will be closed on Monday, December 26, for the Christmas holidays.
With Friday’s move, the S&P 500 and Dow managed to avoid losses for the week, while the Nasdaq fell about 1.5%. Yet markets are poised to complete the worst year for stock markets since 2008, as the trading year ends on Friday, December 30.
Oil prices rose on Friday and headed for a big weekly gain as investors expected a drop in Russian crude supply.
WTI Crude Oil was up 2.77% on Friday at $79.64 a barrel. For the week, WTI gained more than 6% after hitting lows for the year earlier this month.
Yields on US Treasuries rose slightly, while the US dollar index fell against a basket of other currencies.
The flow of economic data has been heavy this week, and Friday was no exception.
The PCE price index — the The Fed’s favorite inflation measure – Friday morning prices went up 5.5% compared to the previous year and 0.1% from the previous month, on par with consensus estimates from economists polled by Bloomberg. The figure marked a moderation in the readings of 6.1% and 0.3% for annual and monthly inflation, respectively, in October.
Core PCE, which excludes volatile components of food and energy, rose 4.7% year-on-year and 0.2% on a monthly basis.
Meanwhile, personal spending stagnated in November to the lowest figure since July.
“The Federal Reserve’s preferred inflation measure continues to fall, which is good news for its most important target, but unfortunately for the market, this is happening at the same time as consumers continue to cut spending,” said independent advisor Alliance Chief Investment. Officer Chris Zaccarelli said in a note.
Elsewhere in the economic data, U.S. consumer attitudes toward the economy improved in december. The University of Michigan said on Friday its consumer confidence index rose to 59.7 this month from 56.8 in November, up slightly from the preliminary reading of 59.1 mid-month. . And new home sales increased slightly in November month-on-month, up 5.8% from October.
After the Fed final political decision of 2022 last week, strategists pointed out that the most surprising data point among officials’ economic projections was an upward revision to their core PCE expectation to 3.5% from 3.1% previously at the end of 2023. This has suggested to many analysts that the Federal Reserve will need to keep rates high through 2023.
“We expect the Fed to revise its forecast downward as early as March, although progress will initially be slow; policymakers seem to have been scarred by the experience of the past year and a half, and will want to be sure they don’t. not drop their numbers prematurely,” Pantheon Macroeconomics chief economist Ian Shepherdson said in a note. “The markets will not wait.”
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Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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