Stock index futures were aiming for a higher start on Tuesday when investors began to digest the second quarter results of a trio of big banks, kicking off the corporate earnings reporting season.
What are the main indexes doing?
Futures in the Dow Jones Industrial Average YM00,
They rose 105 points, or 0.4%, to 26,073, while futures S&P 500 ES00,
it advanced 7.30 points, or 0.2%, to 3,155.50. Nasdaq-100 NQ00 futures,
he gave up a profit by trading 5.75 points below 10,594.25, 0.1% less.
The Dow DJIA,
on Monday it made a profit of 10.50 points, an increase of less than 0.1%, to finish at 26,085.80, while the S&P 500 SPX,
it dropped 29.82 points, or 0.9%, to close at 3,155.22. The Nasdaq COMP Compound,
it led the market action, trading at an intraday record early before turning south in afternoon activity to end the day down 226.60 points, or 2.1%, at 10,390.84.
What is driving the market?
Investors were assimilating the banking giant’s quarterly results JPMorgan Chase & Co.
JPM,
That saw earnings fall but expectations higher, raising stocks in pre-trade.
results of Citigroup Inc.
C,
and Wells Fargo & Co.
WFC
They were also expected before the opening bell.
Dive deep:What to Expect as Banks Report Profits: More Loan Problems but Lots of Fee Income
“These results are likely to be carefully scrutinized for new evidence that US bank chiefs are concerned about neglecting higher provisions regarding large-scale loan losses, after $ 25 billion reserved at the end of the first quarter, “said Michael Hewson, chief market analyst at CMC Markets UK, in a note.
Investors are gearing up for an ugly second-quarter earnings season overall in the wake of the economy’s sudden shutdown this spring due to the coronavirus pandemic. Stock market bulls are looking for results that can beat a low bar, as well as any guidance that points to a third quarter recovery gaining strength in the fourth quarter. Skeptics argue that prospects may disappoint bulls.
Read:S&P 500 earnings plummet as coronavirus hits all sectors, with Wall Street expecting a rebound that may not come
Investors who think the stocks have recovered too much from the March lows seen when the stock plummeted in response to the pandemic point that spread to the continued rise in COVID-19 cases in the US and elsewhere. of the world.
Analysts attributed the blame for Monday’s reversal in part to concerns about the continued rise in infections in the US, particularly after California Governor Gavin Newsom ordered a reversal of indoor operations in restaurants, bars. , zoos, wineries, museums and cinemas.
The death toll in the US is 135,615 and is rising again after it started flattening in mid to late April. There are now 41 US states and regions showing growing cases over a 14-day period, according to a New York Times tracker.
Meanwhile, while stocks have largely been trading laterally since early June, tech stocks, as evidenced by tech Nasdaq, have continued to rise in expectations that top players will remain immune to the effects of the pandemic. , benefiting from changes to distance learning and working from home.
But some investors argue that the tech sector was also lagging behind a pullback, particularly relative to other sectors.
“I tend to think that the Nasdaq is still overbought by a lot and that it needs to fall to the other side of the trading range. What happens next, we’ll know when we get there, “said Michael Kramer, founder of Mott Capital, in a note.
He said there is “considerable distance” to the popular Invesco QQQ Trust Series ETQ QFQ,
which tracks the Nasdaq 100 Index NDX,
fall, with initial support seen at $ 251, with the next level seen near $ 247, about 5% below Monday’s close.
On the data front, the National Federation of Independent Business said its Small Business Optimism Index rose to 100.6 in June, an increase of 6.2 points from the May reading.
The June Consumer Price Index for the United States expires at 8:30 am Eastern Time. Economists surveyed by MarketWatch, on average, expect it to show a 0.5% increase after a 0.1% decrease in May. The core reading, which eliminates volatile food and energy prices, is forecast to show a 0.2% rise after the 0.1% drop in May.
Federal Reserve Governor Lael Brainard will present his remarks at 2 p.m. Eastern, while St. Louis Fed President James Bullard is due to speak at 2:30 p.m. Eastern.
Which companies are in focus?
JPMorgan Chase shares were up 2% in pre-market trading after delivering results, while Citigroup shares were up 1.6% before results and Wells Fargo shares were up 0.7%.
Shares of Delta Air Lines Inc. DAL,
they fell 1.3% in pre-market action after reporting a second-quarter loss higher than expected.
.
