The S&P 500 futures saw little change early Monday as Wall Street prepares for the busiest week of earnings that will feature reports from some of the biggest tech companies.
The futures linked to the broad equity benchmark remained unchanged. Nasdaq 100 futures were up 0.9%. Futures on the Dow Jones Industrial Average, which are less tied to technology stocks, lose around 140 points.
In the coming week, 13 Dow Components and 111 S&P 500 companies will be showing profits. Quarterly reports on deck include reports from Apple, Microsoft, Netflix, Tesla, McDonald’s, Honeywell, Caterpillar and Boeing.
Before the stock market report on Wednesday after the bell in premarket trading, Apple shares rose 2% to around USD 142 per share. Tesla, which also reported on Wednesday, gained 1.5%
“The Street expects robust results from Apple on Wednesday after Cupertino is set to significantly outperform Street estimates across the board,” wrote Wedbush’s Dan Ives, who raised its 12-month price target to $ 175 on Monday. “While the road is forecasting around 220 million iPhone units [for 2021]We believe that based on current developments and in a bull case, Cupertino has the potential to sell north of 240 million units. “
Companies got off to a strong start into the profitable season. Of the S&P 500 components that have already reported profits, 73% have outperformed in both revenue and earnings per share, according to Bank of America.
“Every day you will see the percentage of companies that exceeded expectations, but most companies failed to provide guidance because of Covid,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group.
Wall Street has had a successful week amid the strength of the tech sector. The Dow recorded its fifth positive week in six while the S&P 500 recorded its third positive week in four. The Nasdaq rose 4.19% last week for its best week since November and the fifth positive week in six when stocks of big tech names drove the index to new all-time highs.
The surge came as President Joe Biden tried to push through a $ 1.9 trillion stimulus package that many Republicans in Congress are opposed to. The tax subsidy includes, among other things, direct controls for millions of Americans, aid to state and local governments, funding for Covid vaccines and tests, increasing the minimum wage, and improving unemployment benefits.
The number of coronavirus cases in the US and abroad continues to rise, but many economists are forecasting a return to growth this year.
“We continue to believe that a reduction in virus risk from mass vaccination coupled with fiscal support for consumer spending will result in a mid-year consumption boom and very strong growth in 2021,” Jan Hatzius, chief economist at Goldman Sachs, told a note to customers over the weekend. “We currently forecast GDP growth of + 6.6% for the full year, 2½ percentage points above consensus,” he added.
However, the company found that while risks like insufficient tax subsidies are less likely, other risks remain. Hatzius cited consumers who remained more cautious than expected, as well as the development of a vaccine-resistant virus strain, as possible future headwinds for the market.
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