The positive sentiment appears to have carried forward into the new week, as major index futures all point to a higher opening on Monday. Earnings could exert a significant influence on stocks and the market this week, overshadowing economic data. Tesla, Inc. TSLA, Intel Corp. INTC, and Netflix, Inc. NFLX are among the key companies set to release earnings reports, likely capturing investors’ attention.
Traders will receive data on the central bank’s preferred inflation gauge, specifically the Personal Consumption Expenditure (PCE) Index, on Friday. This number could be crucial as it is expected to shape investor expectations regarding the upcoming rate decision on Jan. 31.
Cues From Last Week's Trading:
Stocks closed the holiday-shortened week ending Jan. 19 on a positive note. Traders overcame early-week jitters caused by some Federal Reserve officials and economic data that dampened hopes of rate cuts. Taiwan Semiconductor Manufacturing Company Limited’s TSM strong outlook attracted buyers back into the market on Thursday. This positive sentiment drove the S&P 500 Index to a record high in Friday’s session.
LPL Financial Chief Global Strategist Quincy Krosby noted, “As technology, semiconductors, and consumer discretionary led the S&P 500 to new highs, it reflected the strength of the growth sectors that underpinned the inherent strength in the bull market that was born earlier last year.”
US Index Performance In Week Ended Jan. 19
| Index | Performance (+/-) | Value |
| Nasdaq Composite | +2.26% | 15,310.97 |
| S&P 500 Index | +1.17% | 4,839.81 |
| Dow Industrials | +0.72% | 37,863.80 |
| Russell 2000 | -0.34% | 1,944.39 |
Analyst Color:
John Lynch, Chief Investment Strategist at Comerica Wealth Management, brought up the possibility for a “double-top” to ensue. Double-top is a bearish technical reversal pattern that is formed after a financial asset tops out at the same level two consecutive times.
“Yet we look for the combination of expanded liquidity, 8.0% earnings growth, and declining inflation-adjusted or "real" interest rates to support higher market multiples as the year progresses,” Lynch said.
“We continue to believe the S&P 500 would be fairly valued in the 5,200 range by yearend.”
Amid the S&P 500’s record close, Carson Group’s Ryan Detrick pointed to a historical pattern that bodes well for the market outlook. Friday’s record close came after the S&P 500 Index went without a high for more than 24 months, he noted. This has happened 13 times since 1957, he said.
In these years, returns have been above average and the average gain has been 11.8%, Detrick said, adding the market was higher 12 of these 13 times.
Futures Today
Futures Performance On Monday
| Futures | Performance (+/-) |
| Nasdaq 100 | +0.57% |
| S&P 500 | +0.31% |
| Dow | +0.14% |
| R2K | +0.23% |
In premarket trading on Monday, the SPDR S&P 500 ETF Trust SPY rose 0.31% to $483.94 and the Invesco QQQ ETF QQQ gained 0.62% to $423.81, according to Benzinga Pro data.
Upcoming Economic Data:
The unfolding week boasts of some key economic data, including the preliminary fourth-quarter GDP data, the December personal income and spending report, the December durable goods orders report, the Conference Board’s leading economic index for December, and the routinely scheduled weekly jobless claims data.
S&P Global’s flash manufacturing and service sector purchasing managers’ indices for January and a couple of housing market readings may also evince some interest.
The Conference Board’s leading economic index due to be released Monday at 10 a.m. is expected to continued contraction in activity. The index is expected to show a 0.3% month-over-month drop, which is not as bad as the 0.5% drop in November.
The Treasury is set to auction three- and six-month bills at 11:30 a.m. ET.
See also: Best Futures Trading Software
Stocks In Focus:
- Archer-Daniels-Midland Company ADM fell over 14% in premarket trading after the company said it has placed CFO Vikram Luthar on administrative leave, effective immediately, amid an ongoing accounting probe.
- United Airlines Holdings, Inc. UAL, Agilysys, Inc. AGYS, Zions Bancorporation, and National Association ZION are due to release their quarterly earnings after the market close.
Commodities, Bonds, Other Global Equity Markets:
Crude oil futures rose 0.23% to $73.42 in early European session on Monday after the commodity added about 0.7% in the past week.
The benchmark 10-year Treasury note fell 0.035 percentage points to 4.111% on Monday.
Asian markets ended mixed on Monday, with China, Hong Kong, and South Korea retreating, while the remaining markets advanced on the positive cues from Wall Street Friday. Chinese and Hong Kong stocks came under pressure on a surge in foreign outflows and heightened short selling, Reuters reported. Traders largely ignored the People’s Bank of China’s hold loan prime rates unchanged.
The Indian market was closed on account of a special holiday.
European stocks showed cautious optimism on Monday ahead of the start of the reporting season. The Euro Stoxx 50 Index was up 0.53% by late-morning trading.
Image generated using AI via Midjourney
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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