April 16, 2024

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S&P 500 futures dip ahead of earnings season

S&P 500 futures dip ahead of earnings season

Traders on the floor of the New York Stock Exchange, June 24, 2022.

Source: NYSE

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

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

The Dow and Standard & Poor’s ended Friday’s trading slightly lower, while the Nasdaq Composite finished slightly lower. It rose for the fifth day in a row. All major averages locked in a winning week after A Stronger than expected jobs report Friday showed that the worrying economic slowdown for investors has not yet arrived and added to the positive sentiment.

Treasury yields jumped, with the two-year Treasury yield flat above the 10-year yield, a reversal many see as an indicator of recession.

“While markets ended in strong green for the week, investors should prepare for continued volatility in July, with continued uncertainty regarding inflation, Federal Reserve policy, recession fears, and the ongoing war between Russia and Ukraine, all while we also turn to businesses,” said Gregg. Pasok, CEO of AXS Investments, “earning season.”

Although the jobs report is beneficial to the economy, it could encourage the Federal Reserve to continue sharp rate hikes in the coming months to combat persistently high inflation. it will be Tested this week With a streak of earnings from major banks and consumer inflation data this week on deck.

“With recession fears weighing on the markets, investors are focusing excessively on corporate earnings for greater clues about the health of US companies and the broader US economy,” Psock said.

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“A clearer lens will be needed to dissect these earnings reports, as a strong second quarter could be accompanied by a very conservative outlook,” he added. “As the costs of goods and other producers continue to rise, companies will consider the extent to which these higher prices can pass to consumers, and similarly, how to keep profits strong amid economic and geopolitical winds and other major headwinds.

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PepsiCo and Delta Air Lines are scheduled to report earnings on Tuesday and Wednesday. JPMorgan Chase, Morgan Stanley, Wells Fargo and Citigroup are all due to report at the end of the week.

Investors are also looking forward to this week’s key inflation data. The June CPI will be released on Wednesday and is expected to show headline inflation, including food and energy, Rise above 8.6% in May.

“Investors expect more aggressive rate hikes from the Fed, unless inflation data shows a significant decline in rates, balanced by concerns that excessive strengthening in interest rates could push the US into recession,” Pasok said.

The June PPI is due on Thursday and the University of Michigan Consumer Confidence report for July is due on Friday.