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Stocks Move Higher as Earnings, Stimulus Mergers Lift Dow Futures; Square Slides

With nearly two-thirds of the S&P 500 reporting June quarter earnings, collective profits are set to rise 89.8% from last year to a share-weighted $432.4 billion.

The Monday Market Minute

  • Global stocks move higher as China's big tech crackdown eases, Europe posts a surge in factory activity and U.S. earnings carry stocks near fresh all-time highs.
  • S&P 500 earnings are set to rise 89.8% from last year to $432.4 billion, while around 88.5% of the 296 companies reporting have topped Street forecasts.
  • Senate lawmakers look set to bring a $1 trillion stimulus bill to the floor this week that includes $550 million in new spending.
  • China officials reportedly set to reach out to the SEC after its looks to tougher rules for foreign listings
  • Square shares slide after payments group buys Australia's Afterpay for $29 billion. 
  • U.S. equity futures suggest a firmer open on Wall Street ahead of another busy earnings week that will be capped by July payroll data Friday .

U.S. equity futures moved higher Monday, putting the S&P 500 within touching distance of another all-time high, as investors prep for a busy week of corporate earnings and a pivotal reading of the job market that could once again test the mettle of the Federal Reserve's low-rate policy stance

Stocks will enter the month of August with a series of bullish tailwinds, however, as benchmark 10-year note yields hold at around 1.224% even as the U.S. debt ceiling suspension expired over the weekend, pushing the Treasury to unveil extraordinary funding plans later today.

On the macro side, a surge in European factory activity -- including the fastest pace of new hiring on record -- suggests the worst of the region's COVID-related slump is behind it, prompting a solid run for stocks to start the session in Frankfurt and London.

Here at home, with around two thirds of the S&P 500 reporting June quarter earnings so far this season, collective profits are forecast to rise 89.8% from last year to a share-weighted $432.4 billion. 

Of the 269 companies reporting, 88.5% have topped Street forecasts, and while some forward guidance -- particularly from the biggest tech companies such as Apple  (AAPL) - Get Apple Inc. (AAPL) Report, Amazon  (AMZN) - Get Amazon.com, Inc. Report and Facebook  (FB) - Get Facebook, Inc. Class A Report -- was modestly disappointing, third quarter earnings are still forecast to rise by 29.7% to a share-weighted $414 billion.

Around 151 companies will report this week, including Eli Lilly  (LLY) - Get Eli Lilly and Company (LLY) Report, CVS Health  (CVS) - Get CVS Health Corporation Report, General Motors  (GM) - Get General Motors Company (GM) Report and Moderna  (MRNA) - Get Moderna, Inc. Report

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A weekend breakthrough by Senate lawmakers also looks set to put a bi-partisan $1 trillion stimulus package -- which includes $550 million in spending spread over the next five years -- to the floor of the upper chamber later this week. 

Put together, the bullish conditions look set to lift U.S. stocks firmly in the green again Monday, with contract tied to the Dow Jones Industrial Average indicating a 125 point opening bell gain and those linked to the S&P 500 priced for a 22 point move to the upside.

Nasdaq Composite futures, meanwhile, are priced for an 80 point jump to start the session, with focus on shares of payments group Square  (SQ) - Get Square, Inc. Class A Report after its planned $29 billion takeover of Australia-based 'buy now, pay later' payments group Afterpay

In Europe, the Stoxx 600 benchmark hit a fresh all-time high of 464.70 points following a better-than-expected reading of second quarter GDP on Friday and today's factory PMI data that helped boost stocks around the region. 

Overnight in Asia, indications that regulators in China are looking to open talks with the Securities & Exchange Commission over its move to toughen guidelines on U.S. listings suggests an easing of the recent big-tech crackdown, helping the MSCI ex-Japan index rise 1.15% from its year-to-date low in a solid Monday rebound.

Japan's Nikkei 225, meanwhile, bounced 1.82% higher from its Friday close -- the lowest since January -- to end the session at 27,781.02 points.