US stock index futures rallied during Sunday night trading as Wall Street prepares for its busiest week of earnings, which will include reports from some of the biggest tech companies.
Futures contracts linked to the Dow Jones Industrial Average hit 74 points, indicating a 91 point jump at the opening bubble. S&P 500 futures advanced 0.33%, while Nasdaq 100 futures were up 0.61%.
Stocks finished mixed Friday – the S&P 500 and Dow ended in the red while the Nasdaq Composite closed at a record high – though all three posted gains for the week. The Dow registered its fifth positive week in six, while the S&P registered its third positive week in four. The Nasdaq rose 4.19% last week for its best week since November and fifth positive week in six as stocks of Big Tech names pushed the index to new all-time highs.
The rise came when President Joe Biden tries to push through a $ 1.9 trillion stimulus program that many Congressional Republicans oppose. The fiscal support includes direct checks on millions of Americans, support to state and local governments, funding for Covid vaccines and testing, an increase in the minimum wage and improved unemployment benefits.
Lindsey Bell, Ally Invest’s chief investment strategist, noted that any additional stimulus could lead to an increase in inflation.
“Right now, watch for signs of inflation as a temporary or more long-term trend. As long as it’s a quick shock, we can see some weakness in the market without any major action from the Fed,” she noted. “On the other hand, persistently high inflation may force the Fed to consider raising interest rates and withdrawing their market support.”
In an inflationary environment, Bell said investors should prefer the consumer goods, energy and financial services sectors. She added that real estate and gold are among the other assets that can help hedge against inflation.
Next week, 13 Dow components and 111 S&P 500 companies will report earnings. Quarterly reports on deck include Apple, Microsoft, Netflix, Tesla, McDonald’s, Honeywell, Caterpillar and Boeing.
According to data from Bank of America, 73% of the S&P 500 components that have already reported earnings have reported both sales and earnings per share. The company said this is on a par with last quarter, when the number of companies hit a record.
The number of coronavirus cases continues to increase in the US and abroad, but many economists predict a return to growth later this year.
“We continue to expect a reduction in virus risk from mass vaccination combined with fiscal support for consumer spending will lead to mid-year consumption growth and very strong growth in 2021,” Jan Hatzius, chief economist at Goldman Sachs, said in a statement. message for customers during the weekend. “We currently forecast GDP growth of + 6.6% year-on-year, 2½ pp above consensus,” he added.
However, the company noted that while risks such as insufficient tax aid now seem less likely, other risks remain. Hatzius cited consumers who remained more cautious than expected, as well as the evolution of a vaccine-resistant virus strain as potential future market headwinds.
The general choice of Biden’s surgeon said Sunday that the US is racing to keep up as the coronavirus mutates.
“The virus is basically telling us it will keep changing and we have to be ready,” said Dr. Vivek Murthy on ABC News “This Week.”
“We need to be number one, have much better genomic surveillance so that we can identify variants when they occur and that means we need to double down on public health measures such as masking and avoiding indoor gatherings,” he added.
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