The Monday Market Minute
- Global stocks slip lower ahead of a busy week for U.S. earnings, with investors focused on Thursday's rate decision from the Federal Reserve.
- China's crackdown on for-profit education firms tips Asia into the red, while Europe slips lower in muted trading.
- Around a third of the S&P 500 will report June quarter earnings this week, including Apple, Microsoft, Google and Amazon.
- Collective S&P 500 profits are forecast to rise 78.1% to a share-weighted $405.8 billion.
- Bitcoin extends weekend gains, trading north of $38,000, as tech CEOs signal further adoption.
- U.S. equity futures suggest a softer open on Wall Street ahead of second quarter earnings from Lockheed Martin and Hasbro as well as new home sales data at 10:00 am Eastern time.
Wall Street futures slipped from record highs Monday ahead of a busy week for U.S. corporate earnings punctuated by what could be a game-changing policy meeting from the Federal Reserve.
Around a third of the S&P 500 is set to report June quarter earnings this week, including the market's four biggest stocks by value: Apple (AAPL) - Get Apple Inc. (AAPL) Report, Microsoft (MSFT) - Get Microsoft Corporation (MSFT) Report, Google parent Alphabet (GOOGL) - Get Alphabet Inc. Class A Report and Amazon (AMZN) - Get Amazon.com, Inc. Report.
Facebook (FB) - Get Facebook, Inc. Class A Report, Tesla (TSLA) - Get Tesla Inc Report, Pfizer (PFE) - Get Pfizer Inc. Report, Exxon Mobil (XOM) - Get Exxon Mobil Corporation Report and Chevron (CVX) - Get Chevron Corporation Report will round out just a few of the bluechip names expected to add their weight to this quarter's blockbuster season, where so far 88.3% of the 120 companies reporting have topped Street forecasts.
At the current pace, second quarter earnings are expected to rise 78.1% from last year to a share-weighted $405.8 billion, which certainly forms part of the thesis as to why all three major benchmarks ended last week at record highs.
Another crucial component in that equation, however, remains the accommodative stance of the Federal Reserve, which is holding down market intertest rates with $120 billion in monthly bond purchases and providing myriad forms of support and liquidity to other areas of the financial ecosystem.
Should Fed Chair Jerome Powell use Thursday's press conference to signal any changes to the central bank's collective stance -- with details likely to following at the annual Jackson Hole symposium in late August -- markets might need to recalibrate growth, inflation and earnings expectations for the coming year.
In the meantime, China's ongoing crackdown on its own financial markets -- this time in the form of privately-run education firms -- as well as the rise in Delta-variant infections and stubbornly high inflation, has stocks on the back foot Monday.
Futures contracts tied to the Dow Jones Industrial Average are indicating a 90 point opening bell retreat from last Friday's record close of 35,061.55 points, while those linked to the S&P 500 are priced for a 9 point pullback.
Tech stocks are holding firm, with Nasdaq Composite futures suggesting a modest 21 point decline to kick off the week as benchmark 10-year Treasury note yields ease to 1.245% in overnight trading.
Bitcoin was also on the march, rising 11% to pass the $38,000 market following positive comments on payment adoption from Twitter (TWTR) - Get Twitter, Inc. Report CEO Jack Dorsey and Tesla founder Elon Musk. A vague report from a London newspaper also intimated that retail giant Amazon could be considering similar changes to its payment policies.
In other markets, European stocks slipped 0.36% in early trading as investors keyed on U.S. futures heading into the active weekly slate, while Asia stocks slumped 2.1% thanks to a 4.4% decline for China's tech-focused CSI 300, which tumbled in the face of Friday's crackdown on for-profit tutoring firms in an effort to alleviate family living costs and boost the nation's flagging birthrate.