Stocks look set to kick off the new week with a positive vibe as traders eagerly anticipate upcoming tech earnings. The market has already factored in a 25 basis point hike from the Federal Reserve during its meeting this week.
All eyes are on the central bank’s post-meeting policy statement, with traders hoping for a potential pivot after the July meeting.
Cues From Past Week’s Trading:
Last week, blue-chip and small-cap stocks worked together to create a positive market performance, with the Dow Industrials shining brightly for the tenth consecutive session.
However, tech stocks experienced a bit of turbulence as investors reacted to earnings reports from industry giants like Tesla, Inc. (NASDAQ:NFLX).
The weak sentiment toward the high-flying techs may also be attributed to the rebalancing of the Nasdaq 100 Index to reduce the influence of high-profile stocks in the index.
US Index Performance In Week Ended July 21
| Index | Performance (+/-) | Value |
| Nasdaq Composite | -0.75% | 14,032.81 |
| S&P 500 Index | +0.69% | 4,536.34 |
| Dow Industrials | +2.08% | 35,227.69 |
| Russell 2000 | +1.51% | 1,960.26 |
Analyst Color:
The market mood during the week is likely to be largely dictated by tech earnings, according to LPL Financial’s Chief Global Strategist Quincy Crosby.
“The test comes … with mega-cap tech earnings and guidance in the headlines that may prove to be even more important than the Fed meeting,” the analyst said.
Earnings from Microsoft Corp. (NASDAQ:META), due on Wednesday hold the key, he said.
“If the bears have their way next week, with company-specific weakness disciplined by the market, they will have declared victory that rich mega-tech valuations have been priced for perfection that even an adoring market can’t reward,” Crosby said.
On the Fed meeting, the analyst said the market fully expects the Fed to raise rates again, but take a long pause until the November meeting, or even suggest or hint that July 26 is a “one and done.”
Futures Today
Futures Performance On Monday
| Futures | Performance (+/-) |
| Nasdaq 100 | +0.32% |
| S&P 500 | +0.24% |
| Dow | +0.18% |
| R2K | +0.13% |
QQQ) gained 0.29% to $376.67, according to Benzinga Pro data.
Upcoming Economic Data:
The unfolding week is data-heavy, with the July meeting of the Federal Open Market Committee meeting – the monetary policy-setting arm of the central bank, taking center stage.
The Fed begins a two-day meeting on Tuesday and a decision is not expected until Wednesday. This time around the central bank will not release its summary of economic projections, which include the dot-plot curve. Chair Jerome Powell is scheduled to host a post-meeting presser to explain away the policy decision and the outlook.
Other first-tier reports to be released during the week include the advance second-quarter GDP estimate and the June personal income and spending data, two consumer confidence readings and durable goods orders data.
Monday, S&P Global will release its flash manufacturing, services and composite purchasing managers index data for July. The triple readings are due at 9:45 a.m. EDT. Economists expect the manufacturing PMI to remain almost flat in contractionary territory at 46.4. The services PMI is also expected to be little changed at 53.1 in July, a tick down from the June reading of 53.2.
The composite PMI is estimated at 54, down from 54.4 in June.
The Treasury will auction three- and six-month auctions at 11:30 a.m. EDT and 2-year note auction at 1 p.m. EDT.
See also: How To Trade Futures
Stocks In Focus:
- Becton, Dickinson and Company (NYSE:BDX) rose over 5% in premarket trading after the company said its received FDA 510 (k) clearance for its updated BD Alaris infusion system. This system connects all patient modules to provide care teams with a single, comprehensive patient view.
- AMC Entertainment Holdings, Inc. (NYSE:AMC) soared over 60% after CEO Adam Aron said the company filed a revised petition for a stock conversion plan to address the Delaware court’s concerns over other shareholders.
- Tesla declined over 1.30%, extending its downward move from Thursday. CEO Elon Musk announced a name change of the social media platform Twitter he owned to X.com.
- High-flier Nvidia Corp. (NASDAQ:NVDA) rose nearly 1%.
- Chevron Corp. (NYSE:CVX) advanced over 0.75% after it issued a positive pre-announcement for the second quarter and extended the retirement age of its CEO.
- Domino’s Pizza, Inc. (NYSE:DPZ) is scheduled to release its quarterly results ahead of the market open.
- Those companies reporting after the market close include NXP Semiconductors N.V. (NASDAQ:FFIV).
Commodities, Bonds, Other Global Equity Markets:
Crude oil futures rallied 0.90% to $77.76 in early European session on Monday after settling the week ended July 21 at $77.07, up 2.18%.
The benchmark 10-year Treasury note fell 0.026 percentage points to 3.813%.
Asian stocks had a mixed session on Monday, as the Japanese market led the gainers, while the Hong Kong, Chinese, Singaporean, Australian and Indian markets ended in the red. Caution ahead of central bank decisions from the U.S. and Europe and lackluster growth in China remained the undercurrent.
The European markets showed edginess amid a slew of business activity data from the region, which came in worse than expected.
Read Next: Federal Reserve Gears Up For Another Rate Hike In Crucial Week For Central Banks
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