Business

Stock futures pause after the latest bounce as a slew of earnings reports emerge


U.S. stock futures were mostly unchanged on Tuesday as the market eyed rushing earnings reports over the next few days.

How to trade stock index futures?
  • S&P 500 Futures Contract
    ES00,
    -0.28%

    down 2 points, or less than 0.1%, to 4034

  • Dow Jones Industrial Average Futures
    YM00,
    -0.22%

    down 30 points, or 0.1%, to 33697

  • Nasdaq 100 futures
    NQ00,
    -0.42%

    down 16 points, or 0.1%, to 11918

On Monday, the Dow Jones Industrial Average
DIA,
+0.76%

up 254 points, or 0.76%, to 33630, S&P 500
SPX,
+1.19%

up 47 points, or 1.19%, to 4020 and Nasdaq Composite
CALCULATOR,
+2.01%

up 224 points, or 2.01%, to 11364. The Nasdaq is up 8.6% year-to-date but still down 29.2% from its record high hit in November 2021.

What is driving the market?

Stock futures were slightly softer as the market took a breather ahead of a big round of earnings after a few days of strong gains.

The S&P 500 index has gained 3.1% in the past two sessions, bringing the index’s gain this year to 4.7%, as investors showed confidence that the Federal Reserve would continue. reduce the rate of interest rate increase in the context of falling inflation and weakening economic indicators. .

The S&P 500 has fallen about 20% last year, mainly because the Fed quickly raised borrowing costs from zero to about 4.25% to 4.50%. It raised rates by 75 basis points in November, 50 basis points in December, and traders are pricing in a rate that is almost 100% certain to only increase by 25 basis points next week.

Investors hope that a less hawkish Fed will help the US economy avoid a hard landing, and this will support corporate earnings, according to analysts.

“Put your hats on because this week’s ride can be tough. And judging by the wave of New Year optimism that the market seems to have surfed quite happily, investors are ready to believe in a soft landing. The question now is how do some of the biggest companies in the world wrap them up in case things end up in a bigger shock?” said Danni Hewson, financial analyst at AJ Bell.

Hewson added: “A series of earnings data is underway and we will eventually have an opportunity to see how faltering consumer confidence and declining discretionary spending have impacted bottom lines. of global giants, from both old and new guardians,” added Hewson.

Companies presenting their results on Tuesday include Microsoft
MSFT,
+0.98%
,
GE
rich man,
+2.69%
,
Johnson & Johnson
JNJ,
-0.25%
,
Verizon
VZ,
-0.93%
,
3M
MMM,
+1.63%
,
Lockheed
LMT,
-0.45%
,
Raytheon
RTX,
+2.00%
,
Texas Instruments
TXN,
+2.99%
,
and tourists
TRV,
+0.56%
.

Wall Street’s latest rally has taken the S&P 500 past several key technical milestones — closing above 4,000 and its 200-day moving average — and this could signal a major technical milestone, analysts say. bodes well for the medium term, analysts said.

“The 2022 bear market looks like it is on thin ice. SPX’s second consecutive day higher has successfully broken above the January 2023 high. This is a positive development that not only overcomes minor downtrends from last fall but also weathered the entire downtrend from last January,” Mark Newton, head of technical strategy at Fundstrat, wrote in a note to clients.

US economic updates set for release on Tuesday include the US S&P ‘blink’ US S&P manufacturing and services PMIs for January, at 9:45 a.m. ET. .

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