Five things you need to know before the market opens on Monday, January 23:
1. — Mixed Stock Futures As Market Eyes on Technology, Dollar Slips
U.S. equity futures traded mixed on Monday, while the dollar extended recent declines in foreign exchange markets and Treasury yields fell lower, as the Investors look ahead to an important week for Wall Street according to the last dovish forecast from a key Federal Reserve official.
About half of the market weight of S&P 500 will report December quarter earnings this week, with investors likely to focus on short-term demand and profit forecasts from some of the world’s biggest companies amid growing near-term concerns. Depression in the world’s largest economy.
Refinitiv data shows that overall S&P 500 earnings will fall 2.9% year over year to $443.4 billion by share weight, though once the volatile energy sector is phased out , that number would drop to about 7.3%.
However, markets are leaning towards softer predictions, following comments late Friday from Fed Governor Christopher Waller in what could be the last public comment from any official before The central bank’s two-day interest rate meeting begins January 31.
Waller said the Fed feels “quite close” to full cap, given the recent downturn in inflationary and the fact that “there seems to be a bit of a storm ahead”, adding that he favors a smaller number 25 base point increase at the next Fed meeting.
The FedWatch by CME . Group put the chance of that spike, this will raise Fed funds rate to a range of 4.5% to 4.75%, at the virtual key level, with an 82.5% chance of a similar increase in March.
Yields on the benchmark 10-year Treasury note were marked slightly lower in overnight trading, falling 2 basis points to 2.48% while the 2-year bond pegged at 4.17%. . The US dollar index, which tracks the greenback against a basket of global currencies, fell 0.31% to 101.690.
That said, despite last week’s tech rally, which lifted the Nasdaq to about 6.2% year-to-date gains, the S&P 500 continues to struggle to extend the 4,000-point mark, a performance level. displays the 200-200 level of the benchmark. day moving average and is considered by traders to be an important technical level during the heavy earnings season.
Before the start of the trading day on Wall Street, futures tied to the S&P 500 were priced at the open 2 points lower while futures linked to the Dow Jones Industrial Average were set at a gain. 27 points. Nasdaq was marked as little changed from Friday’s close of 11,140.44 points.
In overseas markets, the MSCI non-Japan index across the region was up 0.23% at the close, although markets in China and elsewhere remained closed for the Lunar New Year. Meanwhile, Tokyo’s Nikkei 225 index gained 1.33% in a subsequent bounce from Friday’s close on Wall Street led by chip and technology stocks.
Technology was also the leading sector in Europe, where the Stoxx 600 marked 0.24% higher in early trading in Frankfurt, generating a 0.22% gain for the FTSE 100 in London.
2. — Next week: Big earnings wave, PCE inflation data in focus
Wall Street faces an important week in earnings and inflation data over the next five days, ahead of the Fed’s first policy meeting later this month, as it looks like it will test the strength of the recovery. January of the market.
About 88 S&P 500 companies will report 12th-quarter earnings this week as earnings season kicks in – though without any concrete momentum so far.
Of the 56 companies that reported, about 64% beat Wall Street forecasts, a number that compares with the long-term average of about 66.3% but is below the 75.5% average of the previous four quarters.
Microsoft (MSFT) – Get a free reportBoeing airplanes, (father) – Get a free reportJohnson & Johnson (JNJ) – Get a free reportAT&T (t) – Get a free report3M (MMM) – Get a free reportVerizon (VZ) – Get a free reportchevron (CVX) – Get a free report MasterCard (GHOST) – Get a free reportPassport (DRAW) – Get a free report and Tesla (TSLA) – Get a free report are some bluechip names scheduled to be updated Tuesday through Friday.
Friday will also bring an important reading on the Fed’s preferred inflation gauge, core PCE price index, in December, with analysts looking for relief from price pressure, reflecting large monthly decline in headlines CPI Commerce Department report earlier this month.
3. — Salesforce stock soars as Elliott management builds activist stake
Sales force (CRM) – Get a free report shares have been ticking higher in pre-market trading following reports that activist investor Elliott Management has taken a stake in the world’s largest enterprise software corporation.
The Wall Street Journal reported late Sunday that Elliott said it “looks forward to partnering with Salesforce to realize the value that benefits a company of its size,” but did not say whether it whether to seek a seat on the company’s board of directors or for a specific promotion. change.
Earlier this month, the company revealed plans to cut about 10% of its global workforce amid a restructuring strategy under independent CEO Marc Benioff. Salesforce said the job cuts, as well as broader restructuring plans, will cost between $1.4 billion and $2.1 billion, with a loss of about $1 billion expected in the quarter. fourth finance.
Benioff is no longer the independent CEO of the San Francisco-based group after Bret Taylor said he would leave the company to pursue other interests just a year after becoming co-CEO.
Salesforce shares are marked 3.2% in pre-market trading to indicate an opening price of $156,625 per share.
4. — AMD stock extends gains after Barclays upgrade
Advanced micro-device (AMD) – Get a free report Shares edged higher in pre-opening trading after an upgrade from Barclays looks set to prolong last week’s chip sector rally.
Barclays analyst Blayne Curtis upgraded AMD’s rating to ‘overweight’, with an improved $85 price target, citing the chipmaker’s lead over rival Intel INTC in the server market. after launching the new data center product Genoa late last year. CEO Lisa Su said Genoa will translate to “lower capex, lower opex, and lower total cost of ownership” for businesses and for cloud data centers.
Curtis also said AMD could see the potential for it to profit from the Meta Platform as it ramps up spending later this year.
AMD stock was marked 2.61% higher in pre-market trading, following Friday’s 3.5% gain, to indicate an opening price of $71.89 per share. share.
5. — Lawmakers move to adjust debt ceiling calculation
Republican lawmakers said over the weekend that they plan to develop a bipartisan plan that would fundamentally change the way the US calculates its debt ceiling.
The plan, announced by Republican Brian Fitzpatrick and endorsed by Democrat Josh Gottheimer – both sit in their respective parties’ so-called ‘Problem Solvers’ caucus – would replace the current nominal debt ceiling of $31.4 trillion with a rule that would limit total debt to a fraction of domestic output.
Neither legislator offered a figure in their new plan, but with the US debt hovering around 125%. GDPAs growth slows and borrowing is expected to increase, it will likely need to be applied further north than current levels.
A new calculation, however, could end years of partisan debate over the effective nature of the debt ceiling, which has persisted even as Congress unanimously agrees to annual spending plans. individual.
