As we approach the start of today’s session, U.S. stock futures are indicating a down open for the major indexes. In overnight trading, stocks in Asia were up firmly. Meanwhile, the major European indexes are largely in the red today. Elsewhere, oil prices have edged higher, with West Texas Intermediate ahead about 0.3%, at around $81.80 a barrel.
Fourth-quarter earnings season is in full swing, and there are a number of large-cap companies reporting this week, including Microsoft (MSFT), AT&T (T), Tesla (TSLA), Intel (INTC), Visa (V), and American Express (AXP), among many others. But the market (always looking ahead), is more focused on managements’ earnings guidance and any insights they can provide on their business outlook. So far, most economic reports continue to point toward a slowdown in Corporate America’s profits and a weakening economy.
On the economic front, key reports this week include Thursday’s release of the first estimate for fourth-quarter real GDP (gross domestic product), as well as durable goods orders and new home sales for December. Friday’s slate includes the closely watched PCE (personal consumption expenditures) index for December. Traders are hoping that report will provide further confirmation that the Federal Reserve’s money tightening efforts are bringing inflation down. If so, it increases the likelihood that the central bank will make good on its promise to slow its pace. Following a 0.5% uptick in December, the consensus is now looking for the lead bank to vote for a quarter-point increase at the next Federal Open Market Committee (FOMC) meeting, which wraps up on February 1st. However, no matter how favorable the latest inflation data is, the Fed is likely not done, and interest rates will likely remain elevated through at least the remainder of the year. Nonetheless, market participants are eager to welcome any positive developments on this front.
Altogether, stocks started the week on the right foot, making for two up sessions in a row. The Dow Jones Industrials gained 254 points, or 0.8%, while the S&P 500 advanced 47 points (1.2%), and the tech-focused NASDAQ led the pack, moving up 223 points, or 2.0%.
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
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