U.S. stocks could get off to a mixed start on Monday after the averages posted weekly gains for a fifth straight week. The bond market is closed on account of Columbus Day, which is a federal holiday, but the stock market will trade during usual hours. The majority opinion among strategists hints at a potential pause in stock rally over the next couple of weeks before resuming in the final two months of the year.
That said, earning news flow will pick up momentum in the coming days, potentially cushioning any downside. Cumulative earnings of S&P 500 companies are set to rise for a fifth straight quarter, FactSet said. This, though, would mark a slowdown from the 11.2% growth reported for the second quarter.
On Monday, traders could focus on a couple of Fed speeches and a consumer inflation expectations survey as well as the bond yield even as they look ahead to some key earnings reports over the week.
| Futures | Performance (+/-) |
| Nasdaq 100 | +0.35% |
| S&P 500 | +0.23% |
| Dow | -0.06% |
| R2K | +0.36% |
In premarket trading on Monday, the SPDR S&P 500 ETF Trust SPY added 0.19% to $580.68 and the Invesco QQQ ETF QQQ moved up 0.33% to $495.07, according to Benzinga Pro data.
Cues From Last Week:
Despite the consumer price inflation data throwing investors off guard, the market had enough momentum to keep the rally going in the week ended Oct. 11. A rise in bond yields following some recent strong data and the Hurricane Milton threat also exerted downward pressure on the market, but a benign producer price inflation report and a good start to big bank earnings provided the offsetting impact.
The Dow Jones Industrial Average and the S&P 500 Index ended at fresh intraday and closing highs, while the Nasdaq Composite slowly progressed toward its previous closing high of 18,509.34 hit on July 16.
| Index | Week’s Performance (+/) | Value |
| Nasdaq Composite | +1.13% | 18,342.94 |
| S&P 500 Index | +1.11% | 5,815.03 |
| Dow Industrials | +1.21% | 42,863.86 |
| Russell 2000 | +0.98% | 2,188.42 |
Insights From Analysts:
Yardeni Research reiterated its call for the S&P 500 to hit 8,000 by 2030 under its “Roaring 2020s” scenario. The index will be supported on its way higher by earnings rather than rising valuation multiples, the firm said. The comments came in the aftermath of the second anniversary of the bull market that began on Oct. 12, 2022.
The period was marked by widespread fears of a recession due to monetary policy tightening, the firm said. “Those fears lingered through October 4 of this year, when a stronger-than-expected employment report once again confirmed that the young bull correctly discounted that inflation would fall while the economy remained resilient,” it said.
Since Oct. 12, 2022, all the major stock market indices are up at least 20%, with the S&P 500 up 62.6%, Yardeni Research said. The S&P 500’s performance is par for the course compared to the previous eight bull markets, it added.
As the momentum remains firmly to the upside, Fund Strat Head of Research Tom Lee said his firm has advised clients to remain cautious but at the same time buy the dips. In an interview with CNBC on Friday, the strategist said investors want to see who ends up president. “We are in a period where the market is sitting on the sidelines,” he said.
At the same time, 2024 has been such a strong year, he said, adding that the last two weeks have proved that macro is taking a step back now, and liquidity and cash on the sidelines are becoming the dominant factor, Lee said. “There is a lot of firepower supporting stocks post election,” he said.
The Fed is dovish, the economy looks healthy, and therefore the three- and six-month outlook is very strong for stocks, he added.
See Also: How To Trade Futures
Upcoming Economic Data
This week’s economic calendar is dominated by Fed speeches, the September retail sales report and a few manufacturing and housing market data. The New York and Philadelphia Feds will release the results of their respective October manufacturing surveys and the Fed is due to announce its September industrial production data. Among the housing data due this week are the National Association of Home Builders housing market index for October and the Commerce Department’s housing starts report for September.
- On Monday, Minneapolis Fed President Neel Kashkari will make public appearances at 9 am EDT and 5 pm EDT.
- The New York Fed is due to release the results of its survey of consumer expectations for September at 11 a.m. EDT. In August, the one- and five-year ahead inflation expectations remained unchanged at 3% and 2.8%, respectively.
- Federal Reserve Governor Christopher Waller is scheduled to speak at 3 p.m.
Stocks In Focus:
- Tesla, Inc. TSLA climbed 1.80% in premarket trading after Friday’s nearly 9% slump.
- Sirius XM Holdings Inc. SIRI climbed nearly 6% after Berkshire Hathaway, Inc. (NYSE; BRK-A) BRK boosted its stake in the company.
- Boeing Co. BA fell over 1.70% after the company announced the elimination of 10% of its workforce.
- Bitcoin’s BTC/USD rally past $64K sent crypto-linked stocks such as MicroStrategy, Inc. MSTR and Coinbase Global, Inc. COIN higher.
Commodities, Bonds And Global Equity Markets:
Crude oil futures tumbled in the early New York session, losing nearly 2.75% as traders turned jittery after the release of weak China data. Gold futures were little changed.
The 10-year Treasury note yield rose marginally to 4.096%.
Most major Asian markets ended higher on Monday, led by the Chinese market. The New Zealand and Hong Kong markets pulled back while the Japanese market was closed for a public holiday.
European stocks showed tentativeness and were mostly lower in early trading.
Read Next:
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.
