S&P 500 futures slip ahead of a massive earnings week

Futures fell on Sunday night as investors braced for a big first-quarter earnings week.

Dow Jones Industrial Average futures lost about 150 points, or 0.4%. S&P 500 futures fell 0.5%. Nasdaq futures were 0.8% lower.

Bank of America reports quarterly results on Monday before the alarm bells. Some of Dow’s blue chip names report earnings this week, including IBM, Procter and Gamble, Travelers, Dow Inc, Johnson and Johnson, American Express and Verizon.

Tech journalists are also set to report quarterly earnings, with Netflix due on Tuesday and Tesla due Wednesday. Snap report on Thursday. United Airlines, American Airlines and Alaska Air are also on the calendar, as are CSX and Union Pacific rail lines.

Investors will be attentively listening for guidance going forward, especially comments on how companies are handling rising costs. Consumer Price Index in March was released last week showed an increase of 8.5% from a year ago, the fastest annual increase since December 1981

Gerard MacDonell of 22V Research said in a note on Sunday: “It seems a long way from being able to resist core inflation adjusting to an acceptable pace without significantly slowing growth. demand growth”.

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Earnings season got off to a good start with 77% of S&P 500 companies reporting earnings per share that beat FactSet expectations, according to FactSet. Seven percent of benchmarks have reported results so far. Analysts believe first-quarter earnings will grow 5% for the quarter as all S&P 500 companies complete reports, according to FactSet’s analysis of future actual and estimated results.

“We still believe the 2022E EPS could drop a bit during earnings season, but possibly less than we thought a month ago. And the more the company focuses on US services and services, the better the outlook. EPS the better. okay,” Raymond James’ Tavis McCourt said in a Sunday note.

Despite some better-than-expected results, investors sold stocks last week because they feared higher rates and inflation could cloud earnings prospects. The S&P 500 Index fell 2.13% for the second negative week in a row. The Nasdaq Composite lost 2.63% and the Dow fell 0.8% during this time. US stocks are not trading on Friday due to the holiday weekend.

Yields on the 10-year Treasury note last week hit a three-year high above 2.83%, weighing on equities.

Elsewhere, investors will be watching how Twitter trades as markets open. Twitter announced Friday its board of directors has approved a limited-term shareholder rights plan, commonly known as “poison.” This move comes after billionaire Elon Musk offer to buy the company for $43 billion.

—With reporting by CNBC’s Patti Domm.

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