Early indications suggest a nervous start by Wall Street stocks on Monday ahead of some key earnings reports. Apple, Inc. (NASDAQ:AAPL) earnings report due on Thursday could be a make-or-break moment for the market, as it is considered an indicator of the health of global consumers. A slew of labor market readings due this week also has the potential to move stocks.
Cues From Thursday’s Trading:
The major averages advanced in the week ended July 28, as earnings optimism and some benign inflation readings kept sentiment upbeat. Earnings were largely positive, although traders punished companies such as Microsoft Corp. (NASDAQ:MSFT), which issued cautious forward commentary.
The Dow Industrials, which was on a 13-session winning run, snapped the streak after a strong advance second-quarter GDP report reignited rate hike worries. The index came back up to close the week higher. The S&P 500 Index closed the week at an 18-month high.
US Index Performance In Week Ended July 28
Index
Performance (+/-)
Value
Nasdaq Composite
+2.02%
14,316.66
S&P 500 Index
+1.01%
4,582.23
Dow Industrials
+0.66%
35,459.29
Russell 2000
+1.09%
1,981.54
Analyst Color:
The heartening aspect of the current market upside is the broader participation, and LPL Financial’s Chief Technical Strategist Adam Turnquist said technicals confirm the development.
“Technical evidence suggests this year’s rally is no longer just a mega-cap story as broadening participation has changed the narrative,” the analyst said. He noted that the relative performance of the average stock is building and the market’s advance/decline line traded at a new 52-week high.
Also, nearly 75% of the S&P 500 stocks were trading above their 200-day moving average, with cyclical sectors seeing the highest percentages among sector peers, he said. International stocks were also participating in the year’s rally, with most major global benchmarks now in bull market territory, he added.
“Overall, we view the expansion in market breadth as a constructive sign for the sustainability of this bull market.”
Futures Today
Futures Performance On Monday
Futures
Performance (+/-)
Nasdaq 100
-0.05%
S&P 500
+0.04%
Dow
+0.07%
R2K
-0.18%
In premarket trading on Monday, the SPDR S&P 500 ETF Trust (NYSE:SPY) rose 0.06% to $457.19 and the Invesco QQQ ETF (NASDAQ:QQQ) edged down 0.01% to $383.44, according to Zenger News Pro data.
Upcoming Economic Data:
The economic calendar of the week is loaded with job market data and a few manufacturing activity readings. Given Federal Reserve Chair Jerome Powell’s statement that the central bank is going to be data-dependent, each incoming economic evidence has the potential to move the stocks.
The all-important monthly non-farm payrolls data due on Friday, the weekly jobless claims report, the results of ADP’s private payrolls survey, the preliminary second-quarter productivity and costs report and the June Job Openings and Labor Turnover report are the key labor market data expected this week.
Traders also get to digest the Institute of Supply Management’s manufacturing and services purchasing managers’ indices for July and the final readings of S&P Global’s manufacturing and services PMIs as well as the ISM Chicago’s regional business activity data could also garner some attention.
The ISM Chicago is scheduled to release its Chicago business barometer for July at 9:45 a.m. EDT. The index is expected to come in at 43.3, suggesting continuing contraction, but slightly better than the previous month’s 41.5.
The Dallas Federal Reserve’s manufacturing business index is due at 10:30 a.m. EDT. The index is expected to come in at -26.3 in July, worse than June’s reading of -23.2.
The Treasury will auction three- and six-month bills at 11:30 a.m. EDT.
The Federal Reserve will release the results of its loan office survey at 4 p.m. EDT.
See also: How To Trade Futures
Stocks In Focus:
- Palantir Technologies, Inc. (NYSE:PLTR) rose over 4% in premarket trading, extending the upward momentum from Friday.
- Advanced Micro Devices, Inc. (NASDAQ:AMD) climbed about 1% ahead of its quarterly report due Tuesday.
- On Semiconductor Corp. (NASDAQ:ON) and SoFi Technologies, Inc. (NASDAQ:SOFI) are among the important companies releasing their quarterly results ahead of the market open.
- Those reporting after the close include Lattice Semiconductor Corp. (NASDAQ:LSCC), Yum China Holdings, Inc. (NYSE:YUMC), Western Digital Corp. (NASDAQ:WDC), Vornado Realty Trust (NYSE:VNO), Transocean Ltd. (NYSE:RIG), Artista Networks, Inc. (NYSE:ANET), J&J Snack Foods Corp. (NASDAQ:JJSF) and Avis Budget Group, Inc. (NASDAQ:CAR).
Commodities, Bonds, Other Global Equity Markets:
Crude oil futures rallied 0.79% to $81.22 in early European session on Monday after the past week’s 4.6% rally.
The benchmark 10-year Treasury note pulled back by 0.012 percentage points to 3.981%.
The Asian markets rallied across the board, as traders reacted to the strong close on Wall Street overnight. Hopes of stimulus measures from China in the wake of weak manufacturing activity data also buoyed sentiment. The Taiwanese market bucked the uptrend with a sharp retreat.
European stocks traded mixed in late-morning trading as traders digested a mixed inflation report from the eurozone.
Produced in association with Benzinga
