Stocks futures were on the back foot to start the week as traders await earnings from a slew of high-profile tech stocks, with Meta Platforms, Inc. META, Alphabet, Inc. GOOGL GOOG and Amazon, Inc. AMZN being chief among them.
Cues From Past Week’s Trading:
The major averages recorded losses for the week ended April 21, as earnings and recession concerns weighed down on sentiment. Most sessions of the week saw narrowly mixed close, reflecting the nervous mood of the market participants.
The Dow Industrials snapped a four-week winning run and ended the week modestly lower.
|S&P 500 Index||-0.10%||4,133.52|
The S&P 500 Index could retest its October lows this year, given the weakening economic data, decreased bank lending and the Federal Reserve’s “higher-for-longer rate” signal, which will likely work in unison to cause the index to price in a mild-recession scenario, said John Lynch, chief investment officer at Comerica Wealth Management.
The analyst noted that the recent run has left the S&P 500 Index at the top-end of the trading range following its emergence from the October low.
“We believe the combination of declining earnings, weakening economic growth, a steadfast Federal Reserve, and a lack of broad participation suggests the equity market is poised to struggle in the weeks and months ahead,” Lynch said.
“Considering full employment and solid cash levels, we suspect the equity market, as a discounting mechanism will begin to price in a 2024 recovery in the second half of this year.”
Comerica’s 2023 year-end price target for the S&P 500 Index is 4,100-4,200.
|Nasdaq 100 Futures||-0.16%|
|S&P 500 Futures||-0.19%|
Upcoming Economic Data:
The Chicago Federal Reserve’s national activity index for March is due at 8:30 a.m. EDT. The index is expected to improve from -0.19 in February to -0.02 in March, although continuing to suggest contraction.
The Dallas Fed‘s manufacturing business activity index for April due at 10:30 a.m. EDT is expected to come in at -14.6 compared to -15.7 in March.
The Treasury is set to auction three- and six-month notes at 11 a.m. EDT.
See also: How To Trade Futures
Stocks In Focus:
- Bed Bath & Beyond, Inc. BBBY shares plunged nearly 39% in premarket trading after the retailer filed for bankruptcy protection.
- c3.ai, Inc. AI fell over 5%, potentially reacting to a downgrade by Wolf Research from Peer Perform to Underperform with a $14 price target.
- Coca-Cola Company KO is scheduled to report its quarterly results ahead of the market opening.
- Ameriprise Financial, Inc. AMP, Canadian National Railway Company CNI, Cleaveland-Cliffs, Inc. CLF, First Republic Bank FRC, Tenable Holdings, Inc. TENB and Whirlpool Corp. WHR are among the companies reporting after the market close.
Commodities, Bonds, Other Global Equity Markets:
Crude oil futures edged down 0.06% to $77.82 in the early European session on Monday, giving back some of the 0.75% advances notched up on Friday. Oil fell 3.66% in the week ended April 21.
The yield on the benchmark 10-year U.S. Treasury note fell 0.034 percentage points to 3.538%.
The Asian markets closed Monday’s session on a mixed note as traders moved to the sidelines ahead of the U.S. reporting season. European stocks were mostly lower on Monday ahead of a slew of bank earnings from the region.
Swiss investment bank Credit Suisse CS, which was bailed out by UBS Group AG UBS, reported a profit for the first quarter, primarily due to its high-risk debtors being wiped out in the emergency takeover deal. The company also saw a massive outflow of deposits in the first quarter.