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U.S. equity futures were mixed in early Tuesday trading, following along from another record close for the S&P 500, as investors braced for a busy corporate-earnings calendar highlighted by two Magnificent 7 updates after the closing bell.
Stocks powered higher late in the Monday session in the wake of a pullback in Treasury bond yields. That easing was tied to a muted quarterly refunding report, which showed the Treasury predicting a borrowing total of around $760 billion over the three months ending in March.
The smaller-than-expected total, the Treasury said, was tied to “projections of higher net fiscal flows and a higher beginning of quarter cash balance.” The report pulled benchmark 10-year-note yields 4 basis points lower to 4.059%, with 2-year notes were pegged at 4.31% in the overnight session.
Markets today, however, are likely to key on a series of blue-chip earnings updates prior to the start of trading, including United Postal Service (UPS) – Get Free Report, General Motors (GM) – Get Free Report and Pfizer (PFE) – Get Free Report, as well as host of Big Tech updates after the closing bell.
Starbucks (SBUX) – Get Free Report is also set to join Microsoft (MSFT) – Get Free Report, Google parent Alphabet (GOOGL) – Get Free Report and chipmaker Advanced Micro Devices (AMD) – Get Free Report in reporting December-quarter earnings in the after-hours session.
Analysts estimate collective S&P 500 fourth-quarter earnings rose 4.9% from fourth-quarter 2022 to a share-weighted $456 billion, with first-quarter earnings set to improve by around 5.9% to $464.8 billion.
Wall Street’s bulls have taken control of the markets so far this year with six record closes for the S&P 500 over the past seven trading sessions.
MANDEL NGAN/AFP via Getty Images
The Federal Reserve will also begin its two-day policy meeting today in Washington, with its January interest rate announcement set for Wednesday at 2:00 p.m. Eastern, followed 30 minutes later by a news conference with Chairman Jerome Powell.
Traders are not pricing in any chance of a change in the Fed’s benchmark lending rate, currently pegged at between 5.25% and 5.5%. But they see a 46.6% chance that the central bank will begin cutting rates in March, with reductions following in May and June, according to CME Group’s FedWatch.
The Bureau of Labor Statistics will also publish its regular report on job openings and quit rates for the month of December at 10 a.m. Eastern.
On Wall Street, futures tied to the S&P 500, which closed above the 4,900-point mark for the first time in history last night, are priced for a 2-point decline at the start of trading.
Futures contracts tied to the Dow, meanwhile, are priced for a 30-point pullback while the Nasdaq is called 10 points higher.
In Europe, the regionwide Stoxx 600 was marked 0.27% higher in early Frankfurt trading, while Britain’s FTSE 100 rose 0.62% in London.
Overnight in Asia, the MSCI ex-Japan index, the region’s broadest benchmark, rose 0.79% into the close of trading while the Nikkei 225 edged 0.11% higher in Tokyo.
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