US Stocks Prepare For Nervy Start Ahead of Netflix, TI Earnings: Analyst Says Cash Waiting On Sidelines Could Flood Street If This Happens

The mood turned circumspect on Tuesday as traders digested a deluge of earnings reports and anticipated market-moving economic data for the week. Earnings releases from 3M Company MMM and General Electric Co. GE led to a pullback in their stocks during premarket trading. Meanwhile, shares of consumer and personal products company Procter & Gamble PG rose in response to its earnings.

The focus now shifts to after-hours trading when streaming giant Netflix, Inc. NFLX and semiconductor company Texas Instruments, Inc. TXN are set to report. On the economic front, Tuesday represents a lull before a slew of key data, including the Fed’s favorite inflation gauge, begins to roll in.

Cues From Monday's Trading:

U.S. stocks closed higher for a third consecutive session on Monday, with small-caps leading the charge. Although the major averages opened higher, the strength of the rally waned after a report revealed that the Conference Board’s leading economic index fell once again in December. Despite this, the indices showcased resilience, remaining above the unchanged line throughout the session, albeit closing off the highs.

The S&P 500 and the 30-stock Dow Industrial average concluded at fresh all-time highs, while the tech-heavy Nasdaq Composite reached a two-year high. Notably, the Nasdaq 100 Index, consisting of the largest non-financial tech stocks, also achieved record territory.

Among S&P 500 sector indices, buying interest, albeit subdued, was nearly broad-based, with only consumer and utility stocks losing ground.

Analyst Color:

“2024 is off to a nice start,” said fund manager Louis Navellier. There could be some profit-taking after such a strong rally, he said.

A large amount of cash on the sidelines will be looking for an entry point, especially if the market holds on to the new highs through the end of the week, Navellier said, adding that it is then “technicians will declare it ‘confirmed.'”

Futures Today

Futures Performance On Tuesday

In premarket trading on Tuesday, the SPDR S&P 500 ETF Trust SPY rose 0.05% to $483.70 and the Invesco QQQ ETF QQQ gained 0.08% to $422.08, according to Benzinga Pro data.

Upcoming Economic Data:

Richmond Federal Reserve is scheduled to release its manufacturing and services sectors activity data for January at 10 a.m. ET. The sectors saw contraction in the previous month.

The Treasury is due to auction 52-week bills at 11:30 a.m. ET and two-year notes at 1 p.m. ET.

See also: Futures Vs. Options

Stocks In Focus:

• United Airlines Holdings, Inc. UAL climbed over 6% in premarket trading after the airline issued an upbeat outlook.
• Logitech International S.A. LOGI fell over 7.50% despite its earnings beat.
• Cryptocurrency exchange Coinbase Global, Inc. COIN moved down about 5% in reaction to analysts’ downgrade.
• 3M, Procter & Gamble, Verizon Communications Inc. VZ,  D.R. Horton, Inc. DHI, GE,  Johnson & Johnson JNJ, defense contractors Lockheed Martin Corp. LMT and RTX Corporation RTX and Halliburton Company HAL are scheduled to release their quarterly results before the market open.
• Those reporting after the close include Netflix, Steel Dynamics, Inc. STLD, Baker Hughes Company BKR, Intuitive Surgical, Inc. ISRG, Canadian National Railway Company CNI and Texas Instruments.

Commodities, Bonds, Other Global Equity Markets:

Crude oil futures fell 0.91% to $74.08 in early European session on Tuesday following Monday’s 2.42% rally.

The benchmark 10-year Treasury note rose 0.036 percentage points to 4.13% on Tuesday.

Most Asian markets closed higher, with Hong Kong and China leading the way after a Bloomberg report said China is readying a rescue package for its ailing stock market. On the other hand, those bucking the uptrend were Japan, which ended marginally lower despite the Bank of Japan standing pat, the Indian market, which played catchup after Monday’s holiday, and the Singaporean market.

European stocks fell Tuesday as traders reacted to earnings news and looked ahead to Thursday’s rate decision from the European Central Bank.

In the currency market, the U.S. dollar rose against the euro and pound but fell against the yen and commodity currencies.

The cryptocurrency market experienced weakness, as it extended the lean patch seen since the approval of the spot Bitcoin BTC/USD exchange-traded fund. The apex crypto fell over 5% over the past 24 hours and traded around $38,648.