Stock futures inch lower as Wall Street awaits tech earnings
Stock futures fell slightly on Sunday night as investors await a series of corporate earnings from major technology companies, as well as fresh economic data.
Dow Jones Industrial Average futures fell 45 points, or 0.1[ads1]3%. S&P 500 and Nasdaq 100 Futures fell by 0.14% and 0.15% respectively.
The major indexes all closed Friday lower for the week as the earnings season began to ramp up, with several prominent bank names releasing their quarterly results for the first time since the bank failures in March. The Dow fell 0.23%, ending a four-week winning streak. The Nasdaq fell 0.42 percent, while the S&P fell 0.1 percent.
While 76% of S&P 500 companies reporting earnings so far have beaten analysts’ earnings per share estimates, according to FactSet on Friday morning, markets were less optimistic as corporate profits fell. First-quarter earnings for S&P 500 companies are estimated to fall a total of 5.2%, according to Refinitiv data.
Wall Street is looking ahead to mega-cap tech earnings results this week in what will mark the halfway point of earnings season. Alphabet, Microsoft, Amazon and Meta is among the high-interest names scheduled to announce first-quarter results.
“A lot of these companies took 2022 as an opportunity to dump all the bad stuff into their earnings,” Aswath Damodaran, a professor of finance at New York University’s Stern School of Business, told CNBC’s “Closing Bell” on Friday, regarding upcoming technology revenues.
“I wouldn’t be surprised if we see a lot of positive surprises coming out of their earnings reports,” Damodaran added.
Investors are also watching closely for new economic data that will provide insight into whether inflation is easing, or whether the Federal Reserve will announce another rate hike at its next meeting in early May. GDP figures for the first quarter, as well as April’s consumer sentiment data will be released among a number of other economic indicators.
“Part of the reason we’re so focused on economic data is that we think the investor story is still around the Fed and interest rates. And we think the economic reports over the next seven to 10 days are going to be the really big drivers of what The Fed ultimately is going to do,” said Greg Bassuk, managing director of AXS Investments.
Bassuk continued, “We expect the data, frankly, to be mixed. And we think that’s going to continue to cause uncertainty and continued volatility. I think to some extent the Fed rate hike slowed the economy. But there are still elements there things still look pretty robust. Because of that, we think the Fed is likely to do another rate cut.”
Coca Cola and Swiss credit is set to report earnings Monday before the bell. hot tub and First Republic Bank will announce its results after Monday’s trading session. Traders will also watch for the Dallas Fed’s manufacturing survey results to gauge the state of the state’s factory activity.
