fundamental News - DJI5R
The S&P 500 and Nasdaq ended higher on Monday, rising for a fourth
straight day to add to gains after the S&P 500's best week since
July. Investors weighed concerns over elevated inflation against hopes
that more companies will follow the lead of the big banks
last week and post strong quarterly earnings results.
The Dow ended the session slightly lower as shares of Disney
declined by 3%. The moves in U.S. stocks came amid a drop in overseas
equities after China reported its slowest GDP growth rate since last
year for the third quarter, as energy shortages and
property-sector turmoil dragged down economic activity in the world's
second-largest economy. West Texas intermediate crude oil futures
hovered at their highest level since 2014, and the benchmark 10-year
Treasury yield broke back above 1.6%.
This week, investors are looking ahead to a packed slate of
corporate earnings results, which will help offer more insights into how
companies across various industries have navigated inflationary trends,
widespread labor scarcities and lingering virus-related
disruptions. Remarks from some executives have further confirmed the
weight of these issues. Fastenal (FAST) CEO Daniel Florness said during
last week's earnings call that "product and shipping cost inflation is
not just high, it's brutally high."
But an otherwise strong start to earnings season last week helped
fuel optimism that corporate profits held up more strongly than
anticipated across the board, even in the face of a myriad
supply-related challenges. Big banks from Morgan Stanley (MS) to
Bank of America (BAC) and Goldman Sachs (GS) handily topped estimates
in their third quarter results last week, and many of these companies'
executive offered upbeat assessments of the state of the U.S. consumer,
or the demand engine of the U.S. economy. These
remarks had helped affirm trends seen in recent economic data, with
U.S. retail sales unexpectedly posting a monthly gain of 0.9% in
September, government data last week showed.
"We started off this week really strong. The banks have done great
That started to relieve a little bit of people's concerns, especially
when you had the CEOs of the bank saying the consumer looks strong,"
Victoria Fernandez, Crossmark Global Investments
chief market strategist, told Yahoo Finance Live on Friday. "And that, I
think, is going to be the key for the market going forward. If the
consumer is there and they're willing to spend which we've seen in the
month of September [when] retail sales started
to come back a little bit then I think that gives a little more
optimism to the market that as we continue to reopen, as earnings are
strong, the consumer will be there, and the equity markets will continue
to trend higher."
As of Friday, the expected earnings growth rate for the S&P 500 was
30%, according to FactSet. That figure based on both actual earnings
from companies that have reported so far and expectations for future
results represented an increase from the prior week,
when the anticipated earnings growth rate for the third quarter stood
at about 27.6%.
expectation today: bullish