A slew of megacap earnings will be under investor lens after disappointing forecasts from Intel and Tesla last week deepened concerns about overvaluation of the momentum stocks that have spearheaded a market rally since last year’s end. — Reuters pic
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Monday, 29 Jan 2024 11:34 PM MYT
NEW YORK, Jan 29 — US main stock indexes had a sluggish start today, ahead of major events this week including the Federal Reserve’s rate decision and big-ticket tech earnings that could set the tone for Wall Street.
A slew of megacap earnings will be under investor lens after disappointing forecasts from Intel and Tesla last week deepened concerns about overvaluation of the momentum stocks that have spearheaded a market rally since last year’s end.
Microsoft, which through its partnership with Open AI piqued market interest around artificial intelligence in 2023, is expected to report a 15.8 per cent jump in quarterly revenue on Tuesday. The stock was up 0.7 per cent in early trading.
Results from Alphabet, Apple, Meta Platforms, Amazon.com, Exxon Mobil, Chevron, Qualcomm, Merck, Pfizer and Boeing are also due this week.
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“There will be more volatility around the megacap reports, with risk likely being asymmetric to the downside… a great deal of good news has already been priced into these equities,” said Art Hogan, chief market strategist at B Riley Wealth.
However, with recent data indicating a resilient economy and inflation trending lower, hopes of a Goldilocks scenario – a not too hot or cold economy – have gained steam. Last week, data showed a continued moderation in US prices.
So far this month, the S&P 500 has notched an intraday record high for four sessions and its fifth all-time closing high.
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The global focus this week will be the year’s first US monetary policy decision, expected on Wednesday.
Crucial job reports including JOLTS or Job Openings and Labor Turnover Survey and the ADP National Employment will be thoroughly parsed before the Fed’s policy decision for clues on the US labour market strength.
Traders’ bets reflect most expectations of rate cuts in June, with some for as early as March.
At 9:40 a.m. ET, the Dow Jones Industrial Average was up 15.75 points, or 0.04 per cent, at 38,125.18, the S&P 500 was up 3.15 points, or 0.06 per cent, at 4,894.12, and the Nasdaq Composite was up 27.58 points, or 0.18 per cent, at 15,482.94.
The S&P 500 energy sector saw the biggest moves among all the sectors, down 1.0 per cent as crude prices slipped.
IRobot dropped 16.4 per cent as the robot vacuum maker and Amazon dropped their merger plans in the face of opposition from EU antitrust regulators.
Some chip stocks recovered, with Micron Technology, Broadcom and Nvidia rising between 0.8 per cent and 1.3 per cent, after steep losses last week.
Meta Platforms rose 1.2 per cent after brokerage Jefferies raised its target price on the stock to US$455 (RM2,154) from US$425.
Warner Bros Discovery lost 2.4 per cent as brokerage Wells Fargo downgraded the streaming platform to “equal weight” from “overweight”.
Financial technology firm SoFi Technologies jumped 17.3 per cent on posting a fourth-quarter profit after a loss in the year-ago period.
Declining issues outnumbered advancers for a 1.32-to-1 ratio on the NYSE and a 1.18-to-1 ratio on the Nasdaq.
The S&P index recorded 13 new 52-week highs and no new lows, while the Nasdaq recorded 44 new highs and 36 new lows. — Reuters
