U.S. stocks may shake off geopolitical concerns on Monday and aim for a rebound after a week of weakness, as traders eagerly anticipate the upcoming earnings season. Despite tensions between Iran and Israel, diplomatic efforts to ease the crisis seem to reassure the market, minimizing its impact.
Following two consecutive weeks of decline, traders may seize the opportunity for bargain hunting before the reporting season kicks off. Key factors influencing market direction today include big bank earnings and April’s retail sales report.
Futures Performance On Monday ( as of 6:50 a.m. EDT)
| Futures | Performance (+/-) |
| Nasdaq 100 | +0.59% |
| S&P 500 | +0.47% |
| Dow | +0.27% |
| R2K | +0.20% |
In premarket trading on Monday, the SPDR S&P 500 ETF Trust SPY rose 0.45% to $513.15, and the Invesco QQQ ETF QQQ gained 0.57% to $440.75, according to Benzinga Pro data.
Cues From Past Week’s Trading:
U.S. stocks pulled back in the week ended April 12 as hotter-than-expected inflation data and a lackadaisical start to big bank earnings generated selling pressure. The major averages all closed lower for a second straight week, with the Dow Industrials down in all five sessions of the week.
The small-cap space also saw extreme negativity as the “higher-for-long” cues presented by the inflation data proved to be negative for these stocks.
| Index | Performance In Week Ended April 12 (+/-) | Value |
| Nasdaq Composite | -0.45% | 16,175.09 |
| S&P 500 Index | -1.56% | 5,123.41 |
| Dow Industrials | -2.37% | 37,983.24 |
| Russell 2000 | -2.92% | 2,003.17 |
Insights From Analysts:
A tech bull said the sell-off in the tech space is not a signal to throw in the towel on the sector. Wedbush analyst Daniel Ives said in a note the recent “risk-off environment and tech sell-off represents a clear buying opportunity into this upcoming tech earnings season.”
“Our view is tech stocks will go higher for the rest of the year not because of multiples, but as growth and earnings accelerate vs. Street expectations with a key 1Q earnings season around the corner that will lay the groundwork for the next leg up in tech stocks,” he added.
Ives sees the first quarter as a major positive catalysts for tech stocks as he modeled up to an incremental 15% gain for the year.
Fund manager Louis Navellier is positive about the broader market. “There is bargain hunting going on in the market but when earnings start to come out in the third week of April, things are going to firm up really fast,” he said.
Upcoming Economic Data:
The New York Fed’s Empire State manufacturing survey results for April is due at 8:30 a.m., with economists, on average, expecting a reading of -10, suggesting continued contraction. Nevertheless, the contraction is expected to reduce from what is implied by the -20.9 reading recorded for March.
The Commerce Department is scheduled to release its retail sales report for March at 8:30 a.m. EDT. The consensus estimates call for a 0.3% month-over-month increase in retail sales and a 0.5% gain in auto sales, excluding autos. The rate of increase of these metrics came in at 0.6% and 0.3%, respectively, in March.
Also on tap are the Commerce Department’s business inventories report for February and the National Association of Home Builders’ housing market index for April. Both reports are due at 10 a.m. EDT. The housing market index, which is a proxy for homebuilder confidence, is expected to remain at 51. A reading above 50 indicates increasing confidence.
The Treasury will auction three- and six-month bills at 11:30 a.m. EDT.
New York Fed President John Williams is due to make a TV appearance at 8:30 a.m. EDT and San Francisco Fed President Mary Daly will speak at 8 p.m. EDT.
See Also: How To Trade Futures
Stocks In Focus:
- Tesla, Inc. TSLA fell in premarket trading amid rumors of about 10% job cuts.
- Apple, Inc. AAPL declined over 1% after a Bloomberg report flagged weak iPhone sales for the first quarter.
- Salesforce, Inc. CRM moved down about 2.50% on reports of a potential deal to buy Informatica.
- Goldman Sachs Group, Inc. GS and M&T Bank Corporation MTB, as well as Charles Schwab Corporation SCHW, are lined up to report earnings ahead of the market open.
Commodities, Bonds, and Global Equity Markets:
Belying expectations of a sharp rally on supply fears, crude oil futures retreated on Monday. At last check, a barrel of WTI-grade crude was down, about 1% below the $85-a-barrel level. Gold, despite its safe-haven appeal, slid modestly to $2,366.60 an ounce.
After pulling back close to the psychological level of $60,000 on Saturday, Bitcoin BTC/USD rebounded. At last check, the apex crypto traded up about 3% and was last seen above the $66,500 level.
The major markets in Asia, which is in proximity to the Middle East, ended sharply lower. Most major indices from the region retreated, except for China and Indonesia. China, in particular, posted strong gains.
European stocks were also firmly in the green in early trading.
Image via Shutterstock
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
