The New York Stock Exchange ended a hesitant session on Monday without direction, on the eve of important quarterly results, which could set the tone for the market.
According to final results, the Dow Jones index climbed 0.3% to 31,990.04 points and the S&P 500 gained 0.1% to 3966.84 points. The tech-dominated Nasdaq dropped 0.4% to 11,782.67 points.
“The market lost its early trading gains, and it was the Nasdaq that weighed on the broader market in particular,” said Peter Cardillo of Spartan Capital. “The reason for this is that investors are being cautious ahead of the results of the big tech names,” he added.
In Toronto, rising energy stocks helped the benchmark index rise 121.56 points to end the session at 19,104.48.
The week is one of the busiest in terms of corporate results, and figures from the corporations Alphabet (Google) and Microsoft are expected on Tuesday after the close.
In the wake of these expectations, all the big names in the sector ended the session in the red, from Facebook (Meta, -1.6%) to Amazon (-1.1%), via Twitter (-1, 5%) and Netflix (-0.9%).
In total, some 175 S&P 500 companies will publish their quarterly accounts this week, “including the largest in the world”. What make investors anxious, said Wells Fargo analysts.
The Fed in the sights
In addition to corporate earnings, markets will have their eyes on the Federal Reserve (Fed) monetary meeting, which begins on Tuesday. The US central bank is expected to announce a further hike of 0.75 percentage points on Wednesday in a bid to curb inflation, according to the majority of operators.
“This 75 basis point increase is already taken into account by the markets”, noted Peter Cardillo, but according to him, “it is the results of companies that will set the tone for the stock market for the rest of the summer” .
Investors will also watch for crucial indicators of the US economy, starting with the first estimate of GDP in the second quarter expected Thursday. The world’s largest economy was already in contraction in the first quarter (-1.6%). Technically, an economy is considered to be in recession after two consecutive quarters of negative growth.
No recession, says Biden
US President Joe Biden nevertheless assured Monday evening that the country would not experience a recession. Its Treasury Secretary, Janet Yellen, also certified on Sunday that, while the US economy was slowing, the economic data did not announce a recession. “A recession is a generalized contraction that affects many sectors of the economy. We just don’t have that,” she said.
Joe Biden’s assertion comes even though growth figures to be released later this week could show the economy has contracted for a second quarter in a row. “I think we won’t have a recession,” he told reporters. Citing the good employment figures, the American president said he hoped for a soft landing, where the country “would go from this rapid growth to stable growth”.
Janet Yellen was also optimistic that the United States will manage to avoid a recession in the coming months due to the good health of the labor market and consumption. An economic slowdown seems inevitable, but a recession “is simply not compatible with the type of labor market that we see”, she said on July 19.
Second-quarter US gross domestic product (GDP) growth will be released on July 28. Inflation for June measured by the PCE index, the Fed’s favorite barometer, is also expected on Friday.
With Duty