Benzinga - by Shanthi Rexaline, Benzinga Editor.
U.S. stocks are poised for a mixed start on Monday ahead of a deluge of big tech earnings, with optimism surrounding tech earnings likely providing support to the market. This week, Microsoft Corp. (NASDAQ:MSFT), Alphabet, Inc. (NASDAQ:GOOGL) (NASDAQ:GOOG), Amazon.com Inc. (NASDAQ:AMZN), Meta Platforms, Inc. (NASDAQ:META), and Apple, Inc. (NASDAQ:AAPL) are all set to report their quarterly results, and analysts anticipate that AI-focused companies will outperform expectations, potentially sustaining the equity market rally.
Despite this optimism, investors may exercise caution leading up to a two-day Federal Reserve meeting beginning on Tuesday. While economists expect the Fed to maintain the current high rate, traders will be attentive to signals regarding the trajectory of interest rates. Meanwhile, the Chinese market continues to experience volatility, driven by concerns about its troubled property sector.
Cues From Last Week’s Trading:
In the week ending on Jan. 26, major stock indices saw gains for a third consecutive week, buoyed by optimism surrounding the economy, inflation, and earnings. Key drivers included preliminary fourth-quarter GDP data highlighting the economy’s strength, varied earnings reports, and the December personal consumption expenditure index, the Federal Reserve’s preferred inflation measure.
The S&P 500 Index reached record levels for four sessions during the week, concluding just below the record, while the Dow Industrials closed the week in record territory.
US Index Performance In Week Ended Jan. 26
| Index | Performance (+/-) | Value |
| Nasdaq Composite | +0.94% | 15,455.36 |
| S&P 500 Index | +1.06% | 4,890.97 |
| Dow Industrials | +0.65% | 38,109.43 |
| Russell 2000 | +1.75% | 1,978.33 |
Analyst Color:
Following last week’s strong economic data, Comerica Chief Economist Bill Adams said the Fed will not cut rates at this decision, and Chair Jerome Powell will “restrain the urge to kick off the post-decision press conference with a victory lap.”
“The Fed's policymakers are focused on re-anchoring inflation expectations, which edged higher during the last few year surge in prices and are still above pre-pandemic levels by some measures,” the economist said.
“They are going to talk tough for a while longer to convince Americans who worry about inflation that the Fed is firmly committed to keeping inflation on a lower trajectory.”
Futures Today
Futures Performance On Monday
| Futures | Performance (+/-) |
| Nasdaq 100 | +0.21% |
| S&P 500 | +0.03% |
| Dow | -0.03% |
| R2K | -0.15% |
In premarket trading on Monday, the SPDR S&P 500 ETF Trust (NYSE:SPY) edged up 0.08% to $487.78 and the Invesco QQQ ETF (NASDAQ:QQQ) gained 0.19% to $424.62, according to Benzinga Pro data.
Upcoming Economic Data:
The Federal Open Market Committee’s rate decision due on Wednesday is the key economic event scheduled for the week. Given the traders have begun baking in rate cuts, confirmation or rejection of the expectations could create wild gyrations in stocks.
Traders may also evince interest in the monthly non-farm payrolls report due Friday, the ADP private payroll numbers due Wednesday, a duo of readings on the manufacturing sector, two consumer confidence reports, the results of the Labor Department’s “Job Openings and Labor Turnover Survey” survey for December and the weekly jobless claims data.
On Monday, the Dallas Federal Reserve will release its price-consumption expenditure report for December at 9 a.m. ET and the manufacturing index for January at 10:30 a.m. ET.
The Treasury will auction three- and six-month bills at 11:30 a.m. ET.
See also: Best Futures Trading Software
Stocks In Focus:
- Advanced Micro Devices, Inc. (NASDAQ:AMD) rose over 1% in premarket trading ahead of Tuesday’s earnings release.
- Boeing Co. (NYSE:BA) saw modest strength after United Airlines Holdings, Inc. (NYSE:UAL) said it had resumed use of its Boeing 737 MAX 9 jets.
- SoFi Technologies, Inc. (NASDAQ:SOFI) is scheduled to report its earnings ahead of the market opening.
- Those reporting after the close include Cleveland-Cliffs Inc. (NYSE:CLF), F5, Inc. (NASDAQ:FFIV), Nucor Corporation (NYSE:NUE), Sanmina Corporation (NASDAQ:SANM), and Whirlpool Corporation (NYSE:WHR).
Crude oil futures fell 0.62% to $87 in early European session on Monday following Wednesday's nearly 1% rally.
The benchmark 10-year Treasury note fell 0.057 percentage points to 4.103% on Monday, giving back some of the 6.27% gain they made last week.
Most Asian markets advanced on Monday, led by the Japanese, Hong Kong, and South Korean markets amid expectations of the U.S. Federal Reserve giving some visibility into potential rate cuts. China and Singaporean markets, however, bucked the uptrend, with the former succumbing to worries concerning domestic growth and the ailing property sector.
China Evergrande Group tumbled over 20% after a Hong Kong court-ordered liquidation of the company, triggering worries that more dominoes in the Chinese property market will likely fall.
European stocks posted uneasy gains and traded mixed in late-morning trading on Monday.
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