US stock futures rose on Sunday to overnight trading as Wall Street prepares for the busiest earnings week, which will include reports from some of the largest technology companies.
Dow Jones industrial average futures gained 74 points, indicating a 91-point jump in the opening bell. The S&P 500 futures rose 0.33%, while the Nasdaq 100 futures rose 0.61%.
Shares ended mixed on Friday – the S&P 500 and Dow ended in the red, while the Nasdaq Composite closed at a record high – although all three recorded a gain for the week. Dow recorded its fifth positive week in six, while S&P recorded its third positive week in four. The Nasdaq advanced 4.19% last week for the best week in November and the fifth positive week in six, with shares of Big Tech names pushing the index to a new all-time high.
The move has been bigger as President Joe Biden tries to promote a $ 1.9 trillion stimulus program that many congressional Republicans oppose. Tax aid includes direct controls on millions of Americans, aid to state and local governments, funding for Covid vaccines and testing, an increase in the minimum wage, and increased unemployment benefits, among others.
Lindsey Bell, chief investment strategist for Ally Invest, noted that any additional stimulus could lead to higher inflation.
“Right now, look at the signs of inflation as a temporary or longer-term trend. If it’s just a quick shock, we may see a weakness in the market without any major Fed action,” she said. “On the other hand, persistently high inflation may force the Fed to consider raising rates and withdrawing support from the market.”
In an inflationary environment, Bell said investors should favor core consumers, the energy and financial sectors. She added that real estate and gold are among the other assets that can help hedge against inflation.
Next week, 13 Dow components and 111 S&P 500 companies will report earnings. Quarterly reports on the deck include those from Apple, Microsoft, Netflix, Tesla, McDonald’s, Honeywell, Caterpillar and Boeing.
According to data from Bank of America, of the S&P 500 components that have already reported earnings, 73% exceeded both sales and EPS. The company said that this is similar to last quarter, when the number of companies that beat reached a record.
The number of coronavirus cases continues to rise in the US and abroad, but many economists predict a return to growth later this year.
“We continue to expect that a reduction in the risk of the virus due to mass vaccination, together with fiscal support for consumer spending, will lead to an increase in consumption in the middle of the year and a very strong increase in 2021,” said Jan Hatzius. chief economist at Goldman Sachs, in a note to clients over the weekend. “Currently, we forecast GDP growth of + 6.6% year-on-year, with 2½pp above consensus,” he added.
However, the company noted that although risks such as insufficient tax aid now seem less likely, other risks remain. Hatzius noted that consumers remain more cautious than expected, as well as the evolution of a vaccine-resistant virus strain, as potential counter-revenue for the market.
The general election of Biden’s surgeon said on Sunday that the US is fighting to keep up as the coronavirus moves.
“Basically, the virus tells us that it will continue to change and that we need to be prepared for that,” Dr. Vivek Murthy told ABC News “This Week.”
“We need to do number one, do much better genomic surveillance so that we can identify variants when they occur, and that means we need to double our public health measures, such as masking and avoiding gatherings inside,” he said. he added.
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