The sentiment in the market was weak with the broad U.S indexes have dipped slightly on Monday as investors are cautious and pulling back some aggressive bets ahead of a busy week of corporate earnings.
Dow Jones Industrial Average have fell 0.1% while S&P 500 slipped 0.07%. Nasdaq also traded lower by 0.04%
The stock market was coming strong on last week that saw the Dow Jones Industrial Average gained by 2.3%, its highest weekly increase since March. Both Nasdaq and S&P500 also added 2.4% and 3.3% respectively. The gains have follow the indications of softer inflation and strong major bank earnings that have help lifted market sentiment. This has heightened some hopes that the Fed may be able to control inflation without sending the country into a recession.
Chief Market Strategist at StoneX, Kathryn Rooney Vera stated that: “It’s the Goldilocks scenario, its inflation coming down with near record low unemployment. There is pain associated with prices, but people have jobs,” Immaculate disinflation is what has the market in a frenzy, and the evidence is mounting in support of the soft landing perspective.”
While the markets continue to digest the positive news, investors remain cautious and keeping an eye on NY empire state manufacturing index, retail sales, industrial production, business inventories, building permits, housing starts, existing home sales and Philadelphia Fed manufacturing data. Second-quarter earnings season are also due this week with results from big financial institutions such as Bank of America, Morgan Stanley, Goldman Sachs.
Wall Street is preparing for what is expected to be a depressing season with decreased profits. According to FactSet, analysts anticipate a decrease in S&P 500 earnings of more than 7% from the prior year.
The “blackout period” for the Fed’s July policy meeting begins this week as well. According to the FedWatch tool from CME Group, traders believe there is a nearly 97% probability the central bank will raise interest rates later this month after pausing hikes in June.
Please note that this articles does not offer any instructions or suggestions regarding investment decisions. Therefore, it is essential that you carefully evaluate your financial situation and conduct thorough analysis, or seek advice from a qualified professional, before making any investment decisions.