S&P 500 futures lower ahead of earnings season


Source: NYSE

US stock futures fell Sunday evening as Wall Street looked ahead to major corporate earnings reports and key inflation data, following a strong employment report.

Futures linked to the Dow Jones Industrial Average were down 51 points, or 0.1%. S&P 500 futures fell 0.2% and Nasdaq 100 futures lost 0.4%.

On Friday, the Dow and S&P closed trading slightly lower, while the Nasdaq Composite rose for the fifth day in a row† All major averages made for a winning week after a stronger than expected jobs report On Friday, it emerged that the worrying economic downturn for investors has not yet arrived and contributed to positive sentiment.

Treasury yields jumped, with 2-year Treasury yields remaining above 10-year yields, an inversion that many see as a recession indicator.

While markets ended this week in solid green, investors should brace for continued volatility in July, with uncertainties surrounding inflation, Fed policy, recession concerns, the ongoing war between Russia and Ukraine, and that all while also moving into the corporate earnings season,” said Greg Bassuk, chief executive officer at AXS Investments.

The jobs report, while good for the economy, could encourage the Federal Reserve to continue its aggressive rate hikes in the coming months to combat continued high inflation. it will be tested this week with a slew of major bank earnings and consumer inflation data on deck this week.

“As fears of a recession weigh on markets, investors are hyper-focused on corporate earnings to gain more clues about the health of corporate America and the broader US economy,” Bassuk said.

“A sharper lens will be needed to parse these earnings reports as a strong second quarter could be accompanied by a very conservative outlook,” he added. “As the costs of raw materials and other producers remain high, companies will consider the extent to which those increased prices can be passed on to consumers and, also, how they can keep revenues buoyant amid economic, geopolitical and other significant headwinds. .

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PepsiCo and Delta Air Lines will report their results Tuesday and Wednesday. JPMorgan Chase, Morgan Stanley, Wells Fargo and Citigroup will report late this week.

Investors are also looking forward to key inflation data this week. The June consumer price index will be released on Wednesday and is expected to show headline inflation, including food and energy. rises above May 8.6% level†

“Investors expect more aggressive Fed rate hikes unless inflation data shows an excessive fall in prices, balanced against concerns that an overly aggressive rate hike could push the US into recession territory,” Bassuk said.

The June producer price index will be released Thursday and the University of Michigan’s consumer confidence report for July will be released Friday.

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