Investing.com – Wall Street managed to move higher on Friday as markets digested data and comments from the Federal Reserve (Fed), but were still waiting for Congress to decide over healthcare.
At 12:06PM ET (16:06GMT), the Dow Jones gained 33 points, or 0.16%, the S&P 500 rose 8 points, or 0.34%, while the Nasdaq Composite traded up 40 points, or 0.70%.
Market players kept their attention focused on Washington Friday as the House of Representatives cleared the bill for debate with a vote planned later in the day.
U.S. President Donald Trump had told the House that they must vote on the bill or be left with Obama’s Affordable Care Act.
According to a Reuters report, Republicans were still shy of the number of votes to pass the bill.
Investors widely see the Trump administration's struggles to push through the healthcare overhaul as a sign he may also face setbacks delivering on the promises for tax cuts, regulatory reform and infrastructure spending.
Strategists have been cautioning for weeks that markets are pricing in a scenario where nothing goes wrong with Trump's agenda.
Meanwhile, investors were digesting a flood of comments from Federal Reserve (Fed) officials since Thursday’s close on plans for further removal of policy accommodation.
Much of the focus had shifted to talk of the Fed’s plans to normalize its balance sheet, above and beyond the future path of rate hikes which the central bank itself predicted last week would remain at two for this year.
Dallas Fed president Robert Kaplan said after the market close Thursday that policymakers should be moving “deliberately but patiently” towards the removal of accommodation in general. While also noting that three hikes remained a reasonable baseline for this year, Kaplan insisted on the importance of the Fed announcing its plans for reducing the balance sheet.
“We’re approaching a period where we’ll have made some further progress and we’ll be able to make an announcement on our plans for the balance sheet,” he said, adding that he would argue for allowing both Treasuries and mortgage-backed securities to run off.
That followed comments from Minneapolis Fed president Neel Kashkari that he would like to publish the plan for the balance sheet reduction “as soon as possible”.
St. Louis Fed James Bullard said Friday that he would be “okay” with one more rate hike this year and wouldn’t oppose another, though he admitted to being the person on the voting committee with the lowest forecast as he also pointed to the need to begin trimming the balance sheet.
“We should be allowing the balance sheet to normalize naturally now, during relatively good times, in case we are forced to resort to balance sheet policy in a future downturn,” he added.
San Francisco Fed president John Williams was scheduled to discuss monetary policy later on Friday, but had already appeared the prior day in an interview with the Wall Street Journal suggesting that the central bank could raise rates three or four times in 2017 and begin balance sheet tapering by the end of the year.
New York Fed chief William Dudley seemed to back the current Fed outlook for a total of three hikes in 2017, qualifying it as “extremely gradual”. He noted that the central bank was close to the goals of its dual mandate and that inflation would be at risk if unemployment went much lower.
Chicago Fed chief Charles Evans did not address monetary policy or the economic outlook in a pre-recorded introductory message delivered via videolink to a childhood education conference in Washington on Friday.
Markets were pricing in close to a 50% chance of the next rate hike occurring in June, according to Investing.com's Fed Rate Monitor Tool, while the chance for a second policy tightening in December stood around 47%.
In economic data released Friday, durable goods orders rose 1.7% in February, beating estimates for a 1.2% increase and bolstering optimism over the U.S. economy.
The data was in part responsible for the Atlanta Fed’s decision to tick up their estimate of first quarter GDP growth to 1.0%, from the prior 0.9%.
In downbeat economic news, IHS Markit’s composite purchasing managers’ index (PMI) registered its slowest rate of expansion in six months as activity in both the manufacturing and service sectors unexpectedly decreased.
In oil markets, crude prices struggled to recover some lost territory on Friday and was still on track for weekly losses of nearly 3% in what would be its third consecutive weekly decline as investors showed concern over record U.S. crude stockpiles and waited for the technical committee meeting this weekend that will analyze compliance by major oil producers on agreed production cuts. Ministers were also expected to discuss the possibility of an extension of the deal from June.
Market players also looked ahead to weekly data on U.S. drilling activity from Baker Hughes out later on Friday.
Last week the oil services provider said that the number of active U.S. rigs drilling for oil rose by 14 to 631, the ninth weekly increase in a row.
U.S. crude futures gained 0.17% to $47.78 by 12:08PM ET (16:08GMT), while Brent oil edged forward 0.04% to $50.58.