Stocks trade mixed as investors anticipate earnings



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US stocks traded mixed on Monday as investors waited for signs of another rebound in corporate earnings with the start of the second quarter earnings season this week.

The Dow Jones fell to retreat from Friday’s closing record. The S&P 500 also hovered just below an all-time high. However, the Nasdaq gained to a new intraday high as tech stocks outperformed. The 10-year Treasury yield stabilized around 1.35%, recovering after plunging to a five-month low below 1.3% last week.

Big companies will begin reporting second quarter results from Tuesday with big banks JPMorgan Chase (JPM) and Goldman Sachs (GS). With results fueled by strengthening consumer demand as pandemic-related restrictions eased earlier this year, S&P 500 companies are expected to see aggregate profits rise 64% from a year ago , according to FactSet. This would accelerate from the growth rate of around 50% in the first quarter and mark the fastest pace for the index since 2009.

According to Goldman Sachs strategist David Kostin, investors should focus on three main questions for companies as the earnings season approaches: How companies will maintain profit margins given rising input costs and costs. supply chain shortages, how companies plan to prioritize spending especially around taxes affect their outlook.

“Global shipping problems, raw material inflation as well as acute labor and semiconductor shortages have combined to increase costs for businesses across the economy,” Kostin wrote in a note on Monday. “Investors have started to reward companies with attractive margin profiles.”

In addition to the earnings season, this week will also see Federal Reserve Chairman Jerome Powell testifying before Congress with his biannual monetary policy report on Wednesday and Thursday. Experts expected the central bank chief to adopt a more accommodating tone on economic recovery and monetary policy compared to his other recent public remarks, given the mixed jobs report released in June earlier. this month and the Fed minutes from last week showing a central bank divided on the subject. tapering. Additional economic reports on consumer price inflation and retail sales this week should also point to an economic recovery limited by imbalances between supply and demand and high inflation upon reopening.

“I think the recovery is on track, it’s really just the rate of change that has slowed down,” Kathy Jones, chief fixed income strategist at Charles Schwab, told Yahoo Finance. “And we couldn’t keep growing at a 9% to 10% GDP growth rate every quarter, so obviously that’s going to slow down.”

“I think one of the things that came into the markets [Treasury] Perhaps the fall in yields was the fact that the Fed was going to raise rates earlier than expected, ”she added. “This sends a signal to the long end of the bond market that the Fed may not tolerate higher inflation any longer and that they will brake as soon as possible … we don’t think that will be the case though. . We think the economy is doing well, yields are likely to rebound. ”

9:30 a.m.ET: S&P 500, Dow sets records as Nasdaq wins

Here’s where the markets were trading shortly after the opening bell:

  • S&P 500 (^ GSPC): -0.9 point (-0.02%) to 4,368.65

  • Dow (^ DJI): -66.74 (-0.19%) to 34,803.42

  • Nasdaq (^ IXIC): +30.9 (+ 0.21%) to 14,590.83

  • Gross (CL = F): $ -0.97 (-1.3%) to $ 73.59 per barrel

  • Gold (CG = F): – $ 7.40 (-0.41%) to $ 1,803.20 per ounce

  • 10-year cash flow (^ TNX): -0.8 bps for a yield of 1.348%

7:24 a.m. ET Monday: Stock futures point to mixed open

Here’s where the markets were trading on Monday morning:

  • S&P 500 Futures Contracts (ES = F): 4,349.5, -10.5 points (-0.24%)

  • Dow Futures (YM = F): 34,604.00, -147.00 points (-0.42%)

  • Nasdaq Futures (NQ = F): 14,841.75, +31.25 points (+ 0.21%)

  • Gross (CL = F): – $ 1.23 (-1.65%) to $ 73.33 per barrel

  • Gold (CG = F):-$ 10.00 (-0.55%) to $ 1,800.60 per ounce

  • 10-year cash flow (^ TNX): -1.2 bps for a yield of 1.344%

Photo by: zz / STRF / STAR MAX / IPx 2021 03/21/21 Atmosphere in and around Wall Street and the New York Stock Exchange in the financial district of Lower Manhattan, New York on March 21, 2021 during the global pandemic of coronavirus.  Here, the New York Stock Exchange building.  (New York)

Photo by: zz / STRF / STAR MAX / IPx 2021 03/21/21 Atmosphere in and around Wall Street and the New York Stock Exchange in the financial district of Lower Manhattan, New York on March 21, 2021 during the global pandemic of coronavirus. Here, the New York Stock Exchange building. (New York)

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck



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