Investing.com -- U.S. futures rise on Friday, as signs of a dovish policy pivot by the Federal Reserve have the main averages on track to post their seventh-straight winning week. Elsewhere, Costco's quarterly results top estimates thanks in part to cost-focused shoppers snapping up its cut-price options for groceries and essentials.
1. Futures edge higher
U.S. stock futures pointed higher on Friday, hinting at a potential extension in a rally in equities this week fueled by an unexpectedly dovish policy outlook from the Federal Reserve.
At 05:04 ET (10:04 GMT), the Dow futures contract had added 117 points or 0.3%, S&P 500 futures had gained 13 points or 0.3%, and Nasdaq 100 futures had risen by 54 points or 0.3%.
The main indices on Wall Street all finished in the green in the prior session, with all three on pace for their seventh-consecutive positive week. It would be their best weekly winning streak since 2019. The Dow Jones Industrial Average closed 0.4% in the green, after the 30-stock average ended Wednesday at an all-time high level. The benchmark S&P 500 also increased by 0.3% on Thursday, while the tech-heavy Nasdaq Composite inched up by 0.2%.
Bolstering stocks was commentary from the Federal Reserve on Wednesday which suggested that the central bank would start to cut interest rates from more than two-decade highs next year. Stronger-than-anticipated retail sales data on Thursday, along with cooling annual inflation figures earlier in the week, buoyed hopes that the Fed may be able to stick a so-called "soft landing" -- a scenario in which price growth is tamed without sparking an economic meltdown and a spike in unemployment.
2. Gold pushes up
Gold prices rose in European trading on Friday, elongating a push above key levels sparked by a drop in the dollar and Treasury yields on the Fed's signals that it will slash interest rates in 2024.
The yellow metal has rebounded from recent losses this week, as the bank's comments led markets to price in at least three rate cuts by the central bank next year.
There is now a roughly 67% chance the first one may come as soon as March, according to Investing.com's Fed Rate Monitor Tool. The prospect of lower interest rates reduces the opportunity cost of investing in gold, which offers no yields and is driven largely by sentiment and safe haven demand.
The dollar is also now on track for its biggest weekly decline in five months, with the greenback weakening in particular against the British pound and euro after central banks in Europe adopted a notably tougher policy stance than their U.S. counterpart.
Weakening in the dollar helped make gold less expensive for overseas buyers, contributing to a 0.3% jump in spot prices to $2,042.21 per troy ounce by 05:04 ET.
3. Crude set for first weekly gain in two months
Oil prices edged higher Friday, on course for the first weekly gain in two months, boosted by increased optimism over demand growth next year as well as the weaker dollar.
By 05:03 ET, the U.S. crude futures traded 0.2% higher at $71.69 a barrel, while the Brent contract climbed 0.1% to $76.69 per barrel.
Both benchmarks are on track for gains of around 1% this week, breaking a run of seven consecutive losing weeks.
The Fed's indications that borrowing costs may be lower in 2024 underpinned confidence that a stronger U.S. economy will support crude demand in 2024. The International Energy Agency added to this belief by lifting its global oil demand forecast for next year, citing an improvement in the outlook for U.S. demand and lower oil prices.
Meanwhile, the dollar's fall has made oil denominated in the U.S. currency cheaper for foreign purchasers.
4. Costco beats quarterly estimates
Shares in Costco Wholesale (NASDAQ:COST) ticked higher in premarket trading in New York after the membership-only retailer posted quarterly sales and profit that beat projections.
Known for its massive warehouse locations and cheap essentials, Costco has moved to keep prices low in a bid to entice budget-conscious shoppers wary of overspending during a time of elevated inflation and interest rates. Demand has surged for the group's Kirkland Signature own-brand label, as well as its consumable categories like food and sundries.
In a slightly rosier depiction of discretionary spending heading into the holiday season compared to many of Costco's rivals, Chief Financial Officer Richard Galanti added that expenditures on big-ticket items like televisions and appliances showed some improvement. Black Friday and Cyber Monday sales were also better than projected.
Costco reported earnings per share of $3.58 and a 6.1% jump in total revenues to $57.8 billion in its fiscal first quarter.
5. Chinese data mixed as economic concerns persist
Chinese industrial output grew by more than projected in November, although retail sales expanded by less than anticipated, highlighting the ongoing challenge facing policymakers desperate to reinvigorate growth in the world's second-largest economy.
Industrial production increased by 6.6% year-on-year last month, data from the National Bureau of Statistics showed on Friday. The reading was above expectations for an uptick of 5.6%, and accelerated from 4.6% in the prior month. But retail sales rose by 10.1% year-on-year, missing forecasts of 12.5%.
A major factor behind the numbers was a low basis for comparison, given that Chinese factories and stores were still struggling with the final stages of COVID-era lockdowns in late-2022.
Persistent sluggishness in China's post-pandemic recovery has worried investors, with ratings agency Moody’s recently deciding to lower its outlook on the country and flag a potential downgrade to its credit rating. Calls have also been increasing for the Chinese government to roll out more targeted fiscal support.