U.S. stocks could reverse course on Tuesday as traders prepare to receive a barrage of earnings reports and the JOLTS report, which gives information regarding the health of the labor market. Two separate manufacturing activity readings due for the session are widely expected to show that the sector continued to contract in July. Oil price, which was partly responsible for Monday’s gain through its impact on energy stocks, have turned lower.
Cues From Monday’s Trading:
Stocks advanced on Monday as hopes of a strong earnings-heavy week kept sentiment upbeat. The gains were led by small-cap stocks, as evident from the outperformance of the Russell 2000 Index.
The major averages opened higher but experienced some volatility throughout the session before closing modestly higher. All three averages ended July on a positive note as the market scripts a strong recovery from 2022’s dismal performance.
Energy stocks clocked strong gains, helping offset the weakness in the defensive consumer staple and healthcare spaces.
US Index Performance For Monday/July
| Index | Value | Monday’s Performance (+/-) | July’s Performance (+/-) |
| Nasdaq Composite | 14,346.02 | +0.21% | +4.05% |
| S&P 500 Index | 4,588.96 | +0.15% | +3.14% |
| Dow Industrials | 35,559.53 | +0.28% | +3.35% |
| Russell 2000 | 2,003.18 | +1.09% | +6.06% |
Analyst Color:
Analysts at LPL Financial are positive about the near-term market outlook, as stocks have added to their strong first-half gains in July, pushing the S&P 500 over 4,500 and within 4% of a new all-time high.
LPL Chief Economist Jeffrey Roach and Chief Equity Strategist Jeffrey Buchbinder said, “While this latest rally may have outpaced fundamentals and our fair value assessment in the short term, the U.S. economy and corporate America have remained resilient.”
“The latest data, including GDP and inflation data reported last week, slightly raised the odds of a soft landing for the U.S. economy, though our base case still calls for a mild and short-lived recession to begin by year-end,” they added.
“A Fed pause is increasingly likely in September, supporting the case for staying fully invested.”
Futures Today
Futures Performance On Tuesday
| Futures | Performance (+/-) |
| Nasdaq 100 | -0.24% |
| S&P 500 | -0.21% |
| Dow | -0.24% |
| R2K | -0.27% |
QQQ) slipped 0.24% to $382.77, according to Benzinga Pro data.
Upcoming Economic Data:
S&P Global is scheduled to release its final manufacturing purchasing managers’ index for July at 9:45 a.m. EDT. The index is expected to be left unrevised at the flash reading of 49, but up from 46.3 in June.
The Institute of Supply Management is due to release its manufacturing PMI at 10 a.m. EDT, with economists expecting a reading of 46.8 for July compared to 46 in June.
The Bureau of Labor Statistics will release the June Job Openings and Labor Turnover Survey results at 10 a.m. EDT. Job openings in the month are expected at 9.610 million compared to 9.824 million in May.
The Commerce Department is due to release its construction spending report for June at 10 a.m. EDT. Construction spending may have risen at a month-over-month pace of 0.6% compared to 0.9% in May.
See also: Best Futures Trading Software
Stocks In Focus:
- Artista Networks, Inc. (NYSE:ANET) jumped nearly 14% in premarket trading following the release of its quarterly results.
- Merck & Co., Inc. (NYSE:CAT)are among the important companies releasing their quarterly results ahead of the market open.
- Those reporting after the close include Advanced Micro Devices, Inc. (NASDAQ:MSTR).
Commodities, Bonds, and Other Global Equity Markets:
Crude oil futures retreated 0.70% to $81.23 in early European session on Tuesday after Monday’s 1.73% rally.
The benchmark 10-year Treasury note edged up 0.008 percentage points to 3.965%.
The Asian markets ended mixed on Tuesday, with the Japanese, Australian, Taiwanese and South Korean markets advancing while the remaining moved to the downside.
The Reserve Bank of Australia unexpectedly left its benchmark interest rate unchanged at 4.10% but hinted that it may not be done yet.
European stocks pulled back in late-morning trading amid the second-quarter earnings release and weak euro zone manufacturing data.
Photo by Gsign76 on Shutterstock
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