US stock index futures rose overnight in overnight trading as Wall Street prepares for the busiest earnings week, which will include reports from some of the biggest tech companies.
Forward contracts linked to the Dow Jones Industrial Average scored 74 points, indicating a jump of 90 points in public. S&P 500 futures rose 0.33%, while Nasdaq 100 futures rose 0.56%.
Shares ended mixed on Friday – the S&P 500 and Dow ended in the red while the Nasdaq Composite closed at a record high – although all three made a profit for the week. The Dow recorded its fifth positive week in six, while the S&P posted its third positive week in four. The Nasdaq rose 4.19% last week for its best week since November and the fifth positive week in six as shares of Big Tech names lifted the index to a new all-time record.
The move came as President Joe Biden tried to incite a $ 1.9 billion stimulus program that many Republicans opposed. The fiscal aid includes direct checks on millions of Americans, aid to state and local governments, funding for Covid vaccines and testing, including the minimum wage and increased unemployment benefits.
Lindsey Bell, chief investment strategist at Ally Invest, noted that any additional stimulus could lead to an increase in inflation.
“Now look at signs of inflation as a temporary or more long-term trend. If it’s just a quick shock, we could see some weakness in the market without any major Fed action,” she notes. “On the other hand, persistently high inflation may force the Fed to consider raising rates and withdrawing their market support.”
In an inflationary environment, Bell said investors should benefit the consumer products, energy and finance sector. She added that real estate and gold are among the other assets that could help protect inflation.
Over the coming week, 13 Dow components and 111 S&P 500 businesses will report their earnings. Quarterly reports on the deck include those from Apple, Microsoft, Netflix, Tesla, McDonald’s, Honeywell, Caterpillar and Boeing.
According to data from Bank of America, of the S&P 500 components that have already reported revenue, 73% passed on both sales and profit. The firm said it was the same as last quarter when the number of beating companies reached a record.
The number of cases of coronavirus is still increasing in the US and abroad, but many economists predict a return to growth later this year.
“We still expect a reduction in virus risk due to mass vaccination, coupled with fiscal support for consumer spending, to lead to a mid-year consumer boom and very strong growth in 2021,” said Jan Hatzius, chief economist at Goldman Sachs. in a note to customers over the weekend. “We are currently forecasting GDP growth of + 6.6% on a full year-on-year basis, 2½ percent higher than the consensus,” he added.
However, the firm noted that while risks such as inadequate fiscal assistance now seem less likely, there remain other risks. Hatzius argued that consumers are more cautious than expected, as well as the development of a vaccine-resistant virus strain as a possible future wind for the market.
According to Biden’s surgeon general, the US rushed to continue while the coronavirus mutated.
“The virus basically tells us that it will continue to change and we need to be ready for that,” he said. Vivek Murthy told ABC News: “This week.”
“We need to do number one, do much better genomic surveillance so we can identify variants when they occur, and that means we need to double public health measures, such as avoiding masks and indoor gatherings,” he added.
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