Wall Street Futures Slip as Investors Gear Up for Busy Earnings Week
The US stock market is bracing for a flurry of major earnings reports that could either boost or hinder the ongoing rally. As investors prepare for a busy week, Wall Street futures dipped on Monday, with Dow E-minis down 94 points, or 0.22%, S&P 500 E-minis down 17.5 points, or 0.30%, and Nasdaq 100 E-minis down 104 points, or 0.51%.
Earnings Season Heats Up
This week, 114 S&P 500 companies are expected to report quarterly earnings, including big names like International Business Machines, Tesla, and Coca-Cola. The spotlight will also be on the chip sector, with Texas Instruments set to release its results. So far, 83.1% of S&P companies that have reported have beaten earnings estimates, surpassing the 79.1% average of the previous four quarters.
Risks Linger Despite Solid Start to Earnings Season
Despite a strong start to earnings season, upbeat economic data, and continued optimism around Federal Reserve rate cuts, risks remain. Rising geopolitical tensions in the Middle East, gains in Treasury yields, and volatility ahead of the upcoming US presidential election are pressuring equities. Analysts at SEB noted that “stock markets continue to withstand geopolitical turmoil and uncertainty about the US election… the election is getting closer and the uncertainty will in all likelihood remain at least until election night.”
Market Movers
In other news, Boeing jumped 3.6% in premarket trading on news that workers could vote on a new deal to end a costly five-week-long strike. Spirit Airlines skyrocketed 42% after the company reached an agreement to extend a debt refinancing deadline by two months. Humana gained 4.4% after a report said Cigna had resumed merger talks with the health insurer. UPS edged 1.8% lower after Barclays downgraded the parcel service provider to “underweight” from “equal weight”.
Economic Data and Central Bank Speakers
This week, home sales, flash PMI, and durable goods readings are due, as is the Federal Reserve’s Beige Book. A number of central bank speakers are also set to speak, including Fed officials Lorie Logan, Neel Kashkari, Jeffrey Schmid, and Mary Daly.
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