Stock Futures Seek Direction Ahead of Busy Earnings Week, Fed Meeting

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Stock index futures changed little on Monday as investors expected one of the busiest weeks of the earnings season and a meeting of the Federal Reserve’s policy makers. Dow Jones YM00 industrial average futures, + 0.05% were up 6 points to 33,947 S&P 500 ES00 futures, -0.13% were down 5.75 points, or 0.1%, to 4,165.75. Nasdaq-100 NQ00 futures, -0.41%, fell 58.25 points, or 0.4%, to 13,868.75. On Friday, the stock recovered from a previous session sell-off triggered by reports that President Joe Biden planned to push for a sharp increase in the capital gains tax rate for Americans making more than $ 1 million a year. Major benchmarks still suffered weekly losses, with the Dow DJIA, + 0.67% down from 0.5%, the S&P 500 SPX, + 1.09% from 0.1% and the Nasdaq Composite COMP, + 1 , 44% losing 0.3%.

Read: Capital Gains Tax Increase? Why did the market recover so quickly? What drives the market? “Concerns about the COVID situation, a potential increase in the US capital gains tax, and overloaded valuations were some of the reasons for last week’s uneven performance on Wall Street,” said Hussein Sayed, FXTM Chief Market Strategist, on a note. “Still, the S&P 500 Index managed to close near its all-time highs as corporate earnings and economic data reassured investors that stocks remain the best option for increasing wealth,” he said. Investors are gearing up for another busy week in what has so far been an upbeat earnings season. with 181 S&P 500 companies, including 10 Dow constituents, due to the report’s results. Investors will get news of the tech heavyweights, with results from electric carmaker Tesla Inc. TSLA coming after the bell on Monday, + 1.35%, followed later in the week by Microsoft Corp MSFT, + 1.55%, Apple Inc. AAPL, + 1.80%, Google‘s parent company, Alphabet Inc. GOOG, + 2.09% GOOGL, + 2.10%, Facebook Inc. FB, + 1.55% and Inc. AMZN, + 0.96%. Earnings watch: Tesla and Big Tech are poised to accelerate the busiest week of the earnings season As of Friday, a quarter of S&P 500 companies had reported first-quarter results, leaving the index with the highest year-over-year growth in earnings since the third quarter of 2010, according to John Butters, senior earnings analyst at FactSet. Analysts also expect double-digit earnings growth for the remaining three quarters of 2021, he noted. The above-average growth rates are due to a combination of higher earnings for 2021 and an easier comparison with weaker earnings in 2020 due to the negative impact of COVID-19 in numerous industries, it said. The Federal Reserve’s two-day policy meeting, which wraps up on Wednesday, will be in the limelight, although policymakers are not expected to make substantial changes to monetary policy. Economic Preview: Tone of next week’s US economic data on track to be positive, but the Fed will remain deaf. A stronger economic environment is likely to be recognized since the last Fed meeting, but investors should not “read more than they say.” it’s a reasonable indication for the market of where we are right now, ”wrote economists at RBC Capital Markets, in a note. Read: Why the Fed’s focus on those hardest hit by the pandemic matters to markets At his press conference on Wednesday, Powell’s tone is unlikely to change much, analysts said. While the president’s claims that rates are unlikely to be raised before 2022 will likely be challenged over the next year, Powell is likely to stick with his position, they said. Mark Hulbert: Why will it take more than easy money from the Fed to keep sparking this bull market in equities? Durable goods order data for March is due at 8:30 am ET. What companies are you focused on? US health officials lifted an 11-day hiatus at Johnson & Johnson JNJ on Friday, + 0.21% of vaccinations following a recommendation from an expert panel. The drugmaker’s shares rose 0.6% in premarket trading. Otis Worldwide Corp. OTIS, + 0.47% shares rose 2% after the elevator and escalator manufacturing and services company easily beat first-quarter estimates and raised its full-year guidance.