Stocks Set to Open Higher as Investors Await U.S. Jobs Data and Big Tech Earnings, Fed Meeting on Tap

September S&P 500 E-Mini futures (ESU24) are up +0.29%, and September Nasdaq 100 E-Mini futures (NQU24) are up +0.38% this morning as market participants looked ahead to earnings reports from major tech names, the Federal Reserve’s policy meeting, as well as the release of the U.S. jobs report later in the week.

In Friday’s trading session, Wall Street’s major averages ended in the green. 3M Company (MMM) soared about +23% and was the top percentage gainer on the S&P 500 and Dow after the company posted upbeat Q2 results and raised the lower end of its full-year adjusted EPS guidance. Also, Charter Communications (CHTR) surged more than +16% and was the top percentage gainer on the Nasdaq 100 after the cable and internet company reported better-than-expected Q2 results. In addition, Deckers Outdoor (DECK) climbed over +6% after the company reported stronger-than-expected Q1 results and raised its FY25 EPS guidance. On the bearish side, DexCom (DXCM) plummeted more than -40% and was the top percentage loser on the S&P 500 and Nasdaq 100 after the diabetes device maker reported mixed Q2 results, issued below-consensus Q3 revenue guidance, and lowered its FY24 revenue outlook.

Data from the U.S. Department of Commerce on Friday showed that the U.S. core PCE price index, a key inflation gauge monitored by the Federal Reserve, came in at +0.2% m/m and +2.6% y/y in June, compared to expectations of +0.2% m/m and +2.5% y/y. Also, U.S. June personal spending rose +0.3% m/m, in line with expectations, while U.S. June personal income rose +0.2% m/m, weaker than expectations of +0.4% m/m. In addition, the University of Michigan U.S. consumer sentiment index was revised upward to 66.4 in July, stronger than expectations of 66.0. 

The U.S. Federal Reserve’s interest rate decision and Fed Chair Jerome Powell’s post-policy meeting press conference will take center stage in the coming week. The Federal Open Market Committee is widely anticipated to maintain rates at the current range of 5.25% to 5.50%, with investors and economists believing that the central bank won’t adjust rates until its meeting in September. At the same time, economists surveyed by Bloomberg News expect the Fed to signal its intention to lower interest rates in September at the conclusion of its meeting on Wednesday.

Meanwhile, U.S. rate futures have priced in a 99.6% chance of at least a 25 basis point rate cut at the September FOMC meeting and a 61.4% probability of a 25 basis point rate cut at the conclusion of the Fed’s November meeting. 

Second-quarter earnings season continues in full force, and investors anticipate fresh reports from major companies this week, including Microsoft (MSFT), Amazon (AMZN), Meta Platforms (META), Apple (AAPL), Starbucks (SBUX), McDonald’s (MCD), Boeing (BA), Mastercard (MA), Pfizer (PFE), Moderna (MRNA), Merck (MRK), Chevron (CVX), ExxonMobil (XOM), SoFi Technologies (SOFI), Advanced Micro Devices (AMD), Intel (INTC), and Qualcomm (QCOM).

On the economic data front, the U.S. Nonfarm Payrolls report for July will be the main highlight. Also, market participants will be eyeing a spate of other economic data releases, including the U.S. CB Consumer Confidence Index, JOLTs Job Openings, S&P/CS HPI Composite – 20 n.s.a., ADP Nonfarm Employment Change, Employment Cost Index, Chicago PMI, Pending Home Sales, Crude Oil Inventories, Initial Jobless Claims, Nonfarm Productivity (preliminary), Unit Labor Costs (preliminary), S&P Global Manufacturing PMI, Construction Spending, ISM Manufacturing PMI, Average Hourly Earnings, Unemployment Rate, and Factory Orders.

The U.S. economic data slate is mainly empty on Monday.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.169%, down -0.77%.

The Euro Stoxx 50 futures are up +0.12% this morning as investors digested another wave of quarterly earnings reports while also bracing for major central bank decisions later in the week. Energy stocks led the gains on Monday, while household goods stocks lost ground. Meanwhile, investors are awaiting the Bank of England’s policy rate decision on Thursday, with most economists predicting the central bank will lower rates for the first time since the pandemic began, although a close vote is expected. Investors this week will also be closely monitoring a range of regional economic data, including preliminary Eurozone GDP data for the second quarter and preliminary Eurozone inflation data for July. In corporate news, Kon.Philips N.V. (PHIA.NA) surged over +10% after the Dutch medical devices maker reported better-than-expected Q2 results. Also, Merck Kgaa (MRK.D.DX) rose more than +3% after lifting its full-year net sales forecast for the group. At the same time, Heineken (HEIA.NA) slid over -7% after the brewing giant posted weaker-than-expected first-half profit growth.

The European economic data slate is largely empty on Monday.

Asian stock markets today settled in the green. China’s Shanghai Composite Index (SHCOMP) closed up +0.03%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +2.13%.

China’s Shanghai Composite Index closed slightly higher today as investors digested industrial profits data from the country and adopted a cautious stance in anticipation of a crucial Politburo meeting. Bank stocks gained ground on Monday, while pharmaceutical and semiconductor stocks underperformed. Data released by the National Bureau of Statistics on Saturday revealed that the profits of Chinese industrial firms for the first half of the year totaled 3.511 trillion yuan, marking a 3.5% increase from the previous year. Meanwhile, China’s 10-year government bond yield fell to a record low on Monday, underscoring the considerable impact of recent monetary easing measures by the People’s Bank of China intended to support a faltering economy. Market participants are keenly awaiting the upcoming meeting of China’s top decision-making body, the Politburo, which is anticipated to offer insights into near-term policy measures following reforms from the Third Plenum. In addition, investor attention is on July’s PMI figures from the country, scheduled for release on Wednesday, to assess the overall economic health. In corporate news, Beijing Philisense Technology surged over +8% after securing a 1.08 billion yuan deal to lease 4,000 petaflops of computing power to an artificial intelligence firm.

“For the July Politburo meeting, we expect policymakers to remain cautious on growth headwinds, reinforce their easing stance, and signal more policy support for the remainder of this year, especially on the demand-side such as fiscal and housing easing,” analysts at Goldman Sachs said in a note.

Japan’s Nikkei 225 Stock Index closed sharply higher today, tracking Friday’s strong showing on Wall Street. All sectors of the Nikkei 225 ended in the green, with materials and real estate stocks experiencing the largest gains. The Japanese yen held firm on Monday following a rise of over 2% last week, fueled by mounting speculation that the Bank of Japan will hike interest rates in its upcoming meeting to keep inflation under control and bolster the currency. Markets are wagering that the BOJ will raise rates by 10 basis points this week and are widely anticipating that it will detail its quantitative tightening plans. Meanwhile, the top economic council of the Japanese government stated on Monday that the government and central bank must guide policy by carefully considering the impact of the recent weakening of the yen on consumption. In corporate news, Shin-Etsu Chemical climbed over +8% after the silicon wafer producer topped its operating profit forecast for the April-June quarter. At the same time, Eisai plunged about -13% after the European Union regulator adopted a negative opinion on marketing authorization for the drugmaker’s Leqembi treatment for early Alzheimer’s disease. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down -3.47% to 21.43.

Pre-Market U.S. Stock Movers

Alphabet (GOOGL) rose nearly +1% in pre-market trading after Phillip Securities upgraded the stock to Buy from Accumulate with a price target of $205.

Longeveron (LGVN) soared about +36% in pre-market trading after announcing that its positive Phase 2a clinical trial data and biomarker results were highlighted in two presentations, including a Featured Research Session oral presentation, at the Alzheimer’s Association International Conference.

Edwards Lifesciences (EW) gained more than +2% in pre-market trading after Wolfe Research upgraded the stock to Peer Perform from Underperform.

Abbott Laboratories (ABT) slumped over -6% in pre-market trading after the Wall Street Journal reported that a jury in St. Louis ordered the company to pay $495 million in compensation and damages after finding that it failed to warn that its formula for premature infants raised the risk of bowel disease.

Carrier Global (CARR) advanced more than +1% in pre-market trading after BofA upgraded the stock to Neutral from Underperform with a price target of $72.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Monday – July 29th

McDonald’s (MCD), Welltower (WELL), ON Semiconductor (ON), Equity Residential (EQR), SBA Communications (SBAC), Symbotic (SYM), Hologic (HOLX), Revvity (RVTY), CNA Financial (CNA), Woodward (WWD), F5 Networks (FFIV), Chesapeake Energy (CHK), Amkor (AMKR), Crane (CR), Sprouts Farmers (SFM), Lattice (LSCC), Flowserve (FLS), Element Solutions (ESI), Rambus (RMBS), Sensata Tech (ST), Affiliated Managers (AMG), Varonis Systems (VRNS), NewMarket (NEU), Sanmina (SANM), Corcept (CORT), PotlatchDeltic (PCH), CNO Financial (CNO), Alliance Resource (ARLP), COPT Defense Properties (CDP), Cushman & Wakefield (CWK), CVR Energy (CVI), Integra (IART), NeoGenomics (NEO), Centuri Holdings (CTRI), LTC Properties (LTC), Safehold (SAFE), Hope Bancorp (HOPE), Tilray (TLRY), Harmonic (HLIT), Kforce (KFRC), Transcat (TRNS), Netstreit (NTST), Centerspace (CSR).

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On the date of publication, Oleksandr Pylypenko did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.