Last Updated 4:01 PM EST
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Stock indices finished today’s trading session in the green. Indeed, the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) 100 gained 0.14%, 0.4%, and 0.52%, respectively. The real utilities sector (XLU) was the session’s laggard, as it fell 0.28%. Conversely, the energy sector (XLE) was the session’s leader, with a gain of 1.64%.
Furthermore, the U.S. 10-Year Treasury yield increased to 3.87%. The Two-Year Treasury yield also increased, as it hovers around 4.91%. This brings the spread between them to -104 basis points.
In addition, Morgan Stanley’s Michael Wilson flipped the script on inflation fears on Monday, suggesting that disinflation could be the new financial market hurdle. “In 2023, we’ve seen higher valuations due to falling inflation and cost-cutting,” he said. However, Wilson warned that this disinflation is now impacting sales growth, causing investors to focus on companies that boost revenue, not just cost efficiencies.
With the approach of the peak earnings season, Morgan Stanley predicts growing performance discrepancies. Their advice to market players is to keep an eye on stocks with strong earnings, solid cash flow, and improving earnings revisions powered by sales growth.
Last updated: 1:50PM EST
Stocks are in the green so far in today’s trading session. In addition to the Manufacturing PMI report, Markit released its preliminary monthly report for the U.S. Services Purchasing Managers’ Index, which measures the activity levels of purchasing managers in the service sector. A number over 50 represents an expansion, whereas anything below 50 means a contraction. The report came in at 52.4, which was lower than the expected 54.
Last updated: 11:12AM EST
Earlier today, Markit released its preliminary monthly report for the U.S. Manufacturing Purchasing Managers’ Index, which measures the activity levels of purchasing managers in the manufacturing sector. A number over 50 represents an expansion, whereas anything below 50 means a contraction. The report came in at 49, which was higher than the expected 46.4.
It’s worth noting that although this indicator is higher than last month’s reading of 46.3, it has been in an overall downtrend ever since its peak in August 2021, when it hit a high of 63.4.
Last updated: 9:30AM EST
Stocks opened higher at the start of the week as big tech companies are set to announce their earnings this week. The Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) are up by 0.36%, 0.30%, and 0.16%, respectively, at 9:30 a.m. EST, July 24.
First published: 4:15AM EST
U.S. Futures are inching up on Monday morning as traders enter a week packed with big corporate earnings and the FOMC meeting. Last Friday, the Dow continued its winning streak, marking the tenth straight day of gain and the longest since 2017. Futures on the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) are up by 0.31%, 0.16%, and 0.11%, respectively, at 4:00 a.m., EST, July 24.
The Federal Reserve is scheduled for its two-day monetary policy meeting on July 25-26. On Wednesday, the Fed will disclose its decision on the interest rate hike, followed by a speech from Fed Chair Jerome Powell. Markets are pricing in a 25-basis point rate hike this time around. Also, all ears will be on what Powell signals about the health of the economy and the future course of action.
This week, big tech companies including Alphabet (GOOGL), Microsoft (MSFT), Meta Platforms (META), and Amazon (AMZN) are set to report their earnings. Similarly, notable pharma companies, namely Biogen (BIIB), Bristol-Myers Squibb (BMY), and AbbVie (ABBV), report. Also, payment processors Mastercard (MA) and Visa (V), as well as oil & gas players including Shell (SHEL), Chevron (CVX), and ExxonMobil (XOM), will release their quarterly results.
Talking about company-specific news, Theater chain AMC’s (AMC) stock surged over 100% on July 21 following a court ruling that rejected its proposed APE stock conversion deal. Also, billionaire Elon Musk announced yesterday that his social media platform, Twitter, will change its iconic “Blue Bird” logo to “X” effective Monday, July 24.
Turning towards the economic calendar, the S&P Global Mfg. Purchasing Managers’ Index (PMI) data is due today. The Consumer Confidence Index is due out on July 25, and Mortgage Applications and Building Permits are due on Wednesday. On Thursday, key economic data, including the GDP reading and Weekly Initial Jobless claims, will be released, while the Fed’s preferred inflation gauge, the Personal Consumption Expenditures (PCE) will be released on Friday.
Elsewhere, European indices are trading in the red this morning, as a slew of corporate earnings hit the market. Traders also await the European Central Bank’s (ECB) monetary policy decision on Thursday, with a 25-basis-point rate hike expected.
Asia-Pacific Markets End Mixed on Monday
Asia-Pacific indices finished mixed on Monday following a mixed set of data from various nations.
Hong Kong’s Hang Seng index and China’s Shanghai Composite and Shenzhen Component indices finished lower by 2.13%, 0.11%, and 0.58%, respectively.
On the other hand, Japan’s Nikkei and Topix indices ended higher by 1.23% and 0.84%, respectively.
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