US Stocks' Momentum Set To Continue Tuesday As Nasdaq Futures Lead Rally — Tesla, Goldman, J&J, United Airlines In Focus

Zinger Key Points
  • Earnings optimism has inspired traders to come piling back into equity market.
  • The upside could be a bear market rally, given the fluid economic condition, analysts say.
US Stocks' Momentum Set To Continue Tuesday As Nasdaq Futures Lead Rally — Tesla, Goldman, J&J, United Airlines In Focus

The major U.S. index futures are pointing to a markedly higher opening for Wall Street stocks on Tuesday, potentially extending the strong gains from the previous session. The third-quarter reporting season has provided a shot in the arm for the market, which was languishing amid multiple downward catalysts.

Monday, the major averages ended sharply higher, as traders reacted to both positive earnings and expectations of strong earnings. Financial services giant Bank Of America Corp. BAC set the tempo with an above 6% upside following the release of its quarterly results.

The rally was broad-based, with technology and real estate stocks showing marked strength.

Following Monday’s gains, all three averages moved to their highest levels in more than a week.

U.S. Indices' Performance On Monday
Index Performance (+/-)   Value
Nasdaq Composite +3.43%   10,675.80
S&P 500 Index +2.65%   3,677.95
Dow Industrials +1.86%   30,185.82

“We appear to be repeating the 2Q earnings rally where earnings aren’t as bad as feared,” Louis Navellier from Navellier Associates said. The market was also overdue for a rally, especially after the S&P 500 and the Nasdaq Composite Indices were each down in seven of the eight trading sessions, the fund manager added.

Navellier cautioned that even if the economy were headed to a recession in 2023, there will be likely to be bear market rallies along the way.

Here’s a peek into index futures trading:

U.S. Futures' Performance On Tuesday During Premarket Session
Index Performance (+/-)  
Nasdaq 100 Futures +1.76%  
S&P 500 Futures +1.47%  
Dow Futures +1.22%  
R2K Futures +1.52%  

In premarket trading on Monday, the SPDR S&P 500 ETF TrustSPY jumped1.45% to $372.13 and Invesco QQQ TrustQQQ climbed 1.83% to $274.28, according to Benzinga Pro data.

Commenting on the earnings season, Jeffrey Buchbinder, chief equity strategist of LPL Financial, said, “Expectations are very low for this earnings season.”

The key will be guidance, he added. Given companies’ demonstrated ability to manage rising costs in recent quarters and the boost that inflation provides to the revenue line, the analyst doesn’t expect estimates to collapse.

On the economic front, the Federal Reserve is scheduled to release its industrial production report for September at 9:15 a.m. EDT. Economists, on average, expect month-over-month industrial production growth to rebound to 0.1% from minus 0.2% in August.

At 10 a.m. EDT, the National Association of Home Builders will likely release its housing market index for October. The headline index is expected to decelerate to 43 from the 46 reported for September.

See also: Why The Fed Needs To 'Break The Labor Market' To Avoid A 'Wage-Price Spiral'

Stocks In Focus:

  • Goldman Sachs Group, Inc. GS. Hasbro, Inc. HAS, Lockheed Martin Corp. LMIT and Johnson & Johnson JNJ are among the major companies releasing their quarterly results ahead of the market open.
  • Netflix, Inc. NFLX and United Airlines Holdings, Inc. UAL are on tap to report after the market closes.
  • Luxury retailer Nordstrom, Inc. JWN advanced after the company announced its CFO Anne Bramman is quitting by the end of the year.
  • Tesla, Inc. TSLA rose ahead of its results due Wednesday.
  • Large-Cap Pre-Market Movers:
  • Discount retailer Target Corp. TGT rose about 3% in premarket trading after its CEO Brian Cornell spoke at the 2022 Yahoo Finance All Markets Summit.
  • JD.com, Inc. JD and Pinduoduo, Inc. PDD soared close to 3%, in continuation of the China stock rally.
  • Atlassian Corp. TEAM, a developer of software products for the developer community, added close to 2.5%.

Commodities, Global Equity Markets:

WTI-grade crude oil futures pulled back sharply, extending the losses from Monday’s session.

The major Asian averages closed Tuesday’s session higher, encouraged by the positive close by Wall Street stocks overnight. The Chinese market, however, ended mixed.

Stocks in Europe were advancing in early trading.

Read Next: How to Invest In Stocks Directly

Posted In: Nasdaq futuresS&P 500 futuresUS StocksAnalyst ColorEarningsNewsFuturesPreviewsTop StoriesEconomicsFederal ReservePre-Market OutlookMarketsAnalyst RatingsMediaTrading Ideas