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U.S. stock futures were lower on Monday as traders reduced exposure to risk assets ahead of a busy week for company earnings reports.
How are stock-index futures trading
-
S&P 500 futures
ES00,
-0.39%
dipped 15 points, or 0.4% to 4142 -
Dow Jones Industrial Average futures
YM00,
-0.32%
fell 105 points, or 0.3% to 33851 -
Nasdaq 100 futures
NQ00,
-0.42%
eased 48 points, or 0.4% to 13042
On Friday, the Dow Jones Industrial Average
DJIA,
rose 22 points, or 0.07%, to 33809, the S&P 500
SPX,
increased 4 points, or 0.09%, to 4134, and the Nasdaq Composite
COMP,
gained 13 points, or 0.11%, to 12072.
What’s driving markets
A cautious tone was enveloping markets at the start of the week as investors eyed a busy period of corporate results and U.S. economic data that could color the Federal Reserve’s interest rate decision on May 3rd.
“Trading is likely to stay cautious ahead of a raft of big tech results out this week, and the snapshot of U.S. output with first quarter GDP numbers out on Thursday,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.
The U.S. March PCE inflation data, among the Fed’s favored price gauges, will be published on Friday, too.
“Stocks have been ‘grinding’ but with a continued gradual upward bias. The Fed is entering its blackout period in front of the May 3-4 FOMC meeting, so investors will be focused on incoming macro data and on [the] first quarter 2023 earnings season,” said Tom Lee, head of research at Fundstrat.
This week will see 178, or 35%, of the S&P 500 report their numbers. These include on Monday, First Republic Bank
FRC,
Coca-Cola Co.
KO,
Cadence Design Systems
CDNS,
and Ameriprise Financial
AMP,
The likes of Microsoft Corp.
MSFT,
Alphabet Inc.
GOOG,
and Texas Instruments Inc.
TXN,
will report Tuesday.
So far 88 of the S&P 500
SPX,
constituents have published results, and the blended earnings contraction for the index is -6.2%, noted John Butters, senior earnings analysts at FactSet.
“If -6.2% is the actual decline for the quarter, it will mark the largest earnings decline reported by the index since Q2 2020 (-31.6%),” Butters wrote in an email to clients.
This soft profits performance is helping prevent stocks from breaking above the top of an increasingly narrow trading range, according to some analysts.
Source: BTIG
“The SPX has been in a very tight range (4070-4170) over the last three weeks within a wider range (3800-4200) for much of the last year. If the month were over, it would be the narrowest monthly trading range for the SPX since 2019,” said Jonathan Krinsky, chief technical strategist at BTIG.
Stocks are nearly at the end of the traditionally bullish April period and the market “has been unable to breakout above 4200, and now has negative divergences as momentum is rolling over.” Krinsky added.
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