What you need to know…

The S&P 500 Index ($SPX) (SPY) on Friday closed up +0.51%, the Dow Jones Industrials Index ($DOWI) (DIA) closed up +0.44%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed down -0.08%.

U.S. stock indexes on Friday settled mixed, with the S&P 500 posting a 1-1/2 month high and the Dow Jones Industrials posting a 5-week high.   Strength in natural gas producers and LNG export stocks led the overall market higher after the U.S. said it would work with international partners to supply Europe with an additional 15 billion cubic meters of LNG this year. 

Stocks opened higher Friday morning after a report from Bank of America said that poor investor sentiment and continued outflows from equities into cash had triggered a “contrarian buy signal” for global stocks for the first time since March 2020.  In addition, technical buying Friday supported gains in stocks after the S&P 500 closed above its 200-day moving average on Thursday.

Gains in stocks were limited Friday by rising interest rates after the 10-year T-note yield climbed to a 2-3/4 year high of 2.501%.  Also, weaker than expected U.S. economic data on Feb pending home sales and March U.S. Mar consumer sentiment weighed on stocks.

Friday’s U.S. economic data was bearish for stocks after U.S. Feb pending home sales unexpectedly fell -4.1% m/m, weaker than expectations of a +1.0% m/m increase.  Also, the University of Michigan’s final-March U.S. consumer sentiment index was revised downward by -0.3 to a 10-1/2 year low of 59.4.

Hawkish comments Friday from San Francisco Fed President Daly were bearish for stocks when she said Russia's invasion of Ukraine has put "additional pressure on inflation, which is too high" and far from target for price stability.

U.S. Treasury Secretary Yellen said today that while global growth may be dented from the increases in energy and commodity costs from Russia’s invasion of Ukraine, the U.S. economy remains “resilient” at this point.

Today’s stock movers…

Natural gas producers and LNG export stocks rallied Friday after the U.S. and EU announced a pact to try and boost the supply of North American LNG to European countries by the end of this year.  NextDecade (NEXT) closed up more than +30%, Southwestern Energy (SWN) closed up more than +14%.  Coterra Energy (CTRA) closed up more than +6% Friday to lead gainers in the S&P 500. Cheniere Energy (LNG) closed up more than +5%, and Kinder Morgan (KMI) closed up more than +4%. 

Energy stocks and energy service providers rallied Friday after crude prices rose more than +1%.  Phillips 66 (PSX) and Haliburton (HAL) closed up more than +3%, and ConocoPhillips (COP), Marathon Oil (MRO), Diamondback Energy (FANG), and Hess Corp (HES) closed up more than +2%. 

Dexcom (DXCM) closed up more than +2% Friday to lead gainers in the Nasdaq 100 after the company announced a four-for-one stock split.

Mosaic (MOS) closed up more than +3% Friday as the Russia-Ukraine war has curbed supplies of potash and sent fertilizer costs to record highs.

Home Depot (HD) closed down more than -1% Friday to lead losers in the Dow Jones Industrials after offering $4 billion of investment-grade bonds to access funding before the Fed ramps up its interest rate increases. 

U.S.-listed Chinese technology stocks moved lower Friday on worries about earnings and delisting.  JD.com (JD) and Baidu (BIDU) closed down more than -2%, and Pinduoduo (PDD) and Alibaba Group Holding (BABA) closed down more than -1%. 

Across the markets…

June 10-year T-notes (ZNM22) Friday closed down -1-12/32 points, and the 10-year T-note yield jumped +12.0 bp to 2.492%. June T-notes Friday sold off to a 3-year low, and the 10-year T-note soared to a new 2-3/4 year high of 2.501%. 

T-note prices tumbled, and yields jumped Friday after Citigroup said the FOMC would boost interest rates by four straight half-point moves this year.  Citigroup also said it expects “the Fed to continue hiking into 2023” and push the fed funds target range to 3.50% to 3.75% amid persistent inflation.  A jump in global government bond yields Friday also weighed on T-note prices after the 10-year German bund yield rose to a 3-3/4 year high of 0.588% and the Japan 10-year JGB bond yield rose to a 6-year high of 0.241%.