By Investors Hub
The major U.S. index futures are currently pointing to a higher opening on Monday, with stocks likely to extend last week’s run to new record highs.
A positive reaction to earnings news from Citigroup (C) may generate some early buying interest, as the financial giant is moving moderately higher in pre-market trading.
Citigroup kicked off the earnings season by reporting second quarter earnings of $1.95 per share compared to analyst estimates for $1.81 per share. The company also reported stronger than expected revenue growth.
Traders may be reluctant to make substantial moves, however, as a slew of other big-name companies are due to report their quarterly results in the coming days.
Goldman Sachs (GS), Johnson & Johnson (JNJ), JPMorgan (JPM), Kraft Heinz (KHC), IBM (IBM), Microsoft (MSFT), and America Express (AXP) are among the companies due to report their results this week.
Closely watched reports on retail sales, industrial production, homebuilder confidence and housing starts are also likely to attract attention over the next few days.
Extending the upward trend seen over the past few sessions, stocks moved mostly higher during the trading day on Friday. With the continued upward move, the major averages all ended the session at new record closing highs.
The major averages saw further upside going into the close, finishing the day at their best levels of the session. The Dow jumped 243.95 points or 0.9 percent to 27,332.03, the Nasdaq climbed 48.10 points or 0.6 percent to 8,244.14 and the S&P 500 rose 13.86 points or 0.5 percent to 3,013.77.
For the week, the Dow surged up by 1.5 percent, while the Nasdaq and the S&P 500 advanced by 1 percent and 0.8 percent, respectively.
The markets continued to benefit from renewed optimism about the Federal Reserve lowering interest rates as soon as its next meeting later this month.
Congressional testimony from Fed Chairman Jerome Powell indicating crosscurrents, such as trade tensions and concerns about global growth, have continued to weigh on the U.S. economic outlook helped spark the resurgence in optimism about a rate cut.
Powell’s remarks triggered an upward trend on Wall Street that lifted the Dow above the 27,000 level for the first time ever.
Trading activity was somewhat subdued, however, as traders brace for the unofficial start of earnings season next week.
Citigroup (C), Goldman Sachs (GS), Johnson & Johnson (JNJ), JPMorgan (JPM), Wells Fargo (WFC), IBM (IBM), Netflix (NFLX), Microsoft (MSFT), and American Express (AXP) are among the slew of companies due to report their quarterly results.
Meanwhile, traders largely shrugged off a report from the Labor Department showing U.S. producer prices unexpectedly edged higher in the month of June.
The Labor Department said its producer price index for final demand inched up by 0.1 percent in June, matching the uptick seen in May. Economists had expected producer prices to come in unchanged.
Excluding food and energy prices, core producer prices climbed by 0.3 percent in June after rising by 0.2 percent in May. Core prices had been expected to show another 0.2 percent increase.
“The small gain in producer prices in June suggests the increase in tariffs on $200bn of imports from China has yet to generate a pick-up in inflation and confirms that underlying domestic inflationary pressures remain subdued,” said Michael Pearce, Senior U.S. Economist at Capital Economics.
He added, “That should help ease any fears, following the June CPI figures released yesterday, that underlying consumer price inflation will rise back above 2%.”
Transportation stocks moved sharply higher over the course of the trading session, driving the Dow Jones Transportation Average up by 2.4 percent. With the jump, the average ended the session at its best closing level in two months.
Significant strength was also visible among semiconductor stocks, as reflected by the 1.9 percent gain posted by the Philadelphia Semiconductor Index.
Chemical, gold and steel stocks also saw notable strength on the day, moving higher along with most of the other major sectors.
On the other hand, pharmaceutical stocks extended the sell-off seen in the previous session, dragging the NYSE Arca Pharmaceutical Index down by 2 percent to its lowest closing level in over a month.
Adedapo Adesanya