In overnight trade, stock futures modestly increased as the S&P 500 attempted to end its best January since 2019.
S&P 500 futures saw an increase of 0.26%, while Dow Jones Industrial Average futures edged up by 0.15%, or 49 points. Futures for the Nasdaq 100 rose 0.28%.
The overnight movements came after a break in markets’ stellar January. The Dow lost 260.99 points, or 0.77%, during regular trade, while the S&P and Nasdaq Composite lost 1.30% and 1.96%, respectively.
Following a dismal 2022, which was the worst year for markets since 2008, stocks have risen to start the new year. As of Monday’s closing, the S&P and Dow are up 4.64% and 1.72%, respectively, for the month of January, and are on pace to post their third consecutive month of gains. With a gain of 8.86% this month, the Nasdaq Composite is on track to have its best month since July.
According to Adam Parker of Triradiate Research, “people got too negative on revisions, which is why I’ve been optimistic on equities to start the year,” on Monday’s episode of CNBC’s “Closing Bell: Overtime.” “That isn’t the situation. Not a tanking backdrop, but one that is degrading and slowing down.
A strong January should bode well for the market and could signal a sustained upswing in the months to come. According to a tweet from Ryan Detrick of Carson Group, the benchmark index increased 30% on average for the entire year in the five cases where the S&P gained more than 5% in January following a bearish year.
This current gain, however, may be in peril due to a busy week of results, which includes reports from companies including McDonald’s, Meta Platforms, and Amazon. In light of soaring inflation and concerns over sluggish consumer spending, investors are keenly awaiting comments on how some of the biggest corporations are faring.
As the Federal Reserve begins its most recent policy meeting on Tuesday, attention also shifts to the most recent interest rate decision that will follow. The majority of traders anticipate a 25-basis point increase, but they will keep an eye on the discussion for signs of when or how much longer the Fed plans to keep raising rates.
McDonald’s, Caterpillar, General Motors, Pfizer, and Advanced Micro Devices are among the companies reporting Tuesday.
Source (CNBC)
