(News Bulletin 247) – The New York Stock Exchange is expected to open with little change on Monday morning as investors refrain from taking too much risk as the quarterly earnings season kicks off.
Half an hour before the opening, the futures contracts on the major New York indices are all oscillating around their point of equilibrium, announcing an unchanged or almost unchanged start to the session.
This new earnings season promises to be the next center of interest on Wall Street, with the objective of determining whether or not US stocks can continue their recent rebound.
The Dow Jones and the S&P 500 gained around 1% last week, which allowed them to align a fourth week of growth out of five.
The rise of results publications this week could give a new impetus to the American stock market, or on the contrary make it falter.
Earnings for companies making up the S&P 500 are expected to fall 6.5% on average over the January-March period, which would be their steepest decline since the second quarter of 2020, at the height of the Covid.
If these results and the objectives turn out to be worse than expected, Wall Street – already threatened by the prospect of a coming recession – could experience a new episode of volatility.
“With the S&P 500 index oversold in the short term and close to its resistance at 4200 points, we would tend to be relatively cautious when putting more money on the table at current levels”, warns Mike Gibbs, analyst at Raymond James.
Among the heavyweights due to announce their quarterly accounts this week are, among others, Bank of America, Netflix, Tesla, J&J, Morgan Stanley and Procter & Gamble.
A sign of the return to calm in the markets, the CBOE’s VIX volatility index, a closely followed barometer of investor nervousness on the American markets, is hovering around 17.7 points, the lowest since January 2022.
On the economic front, investors learned this morning that manufacturing activity in the New York area returned to expansion in April.
The local Fed’s Empire State index thus came out at +10.8 for the current month, compared to -24.6 in March, a much stronger improvement than expected.
This is the first time since last November that the index has moved into the positive zone, providing a new signal of the resistance of the American economy.
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