Live stock market news: August 1, 2022
U.S. equity futures slipped early on Monday, implying a lower open to start trading in August after the three major indexes posted their best month since 2020.
S&P 500 futures fell 0.3%, while Dow Jones Industrial Average futures edged down about 60 points, or 0.2%. Contracts on the tech-heavy Nasdaq Composite fell 0.3%.
The moves come after stocks capped a month of strong gains on Friday. In July, the benchmark S&P 500 index rebounded 9.1%, battling its worst start to the year since 1962. The Nasdaq Composite climbed 12.3% to record one of its best months on record , and the Dow Jones Industrial Average rose 6.7% for the month.
DataTrek’s Nicholas Colas points out that over the past few weeks stocks have exhibited typical “risk” behavior, with small cap stocks outperforming large caps and the Nasdaq Composite beating the S&P 500. The slowing economy could encourage the Federal Reserve to reduce its rate hike cycle in the fall.
“Summer is a great time to go camping, but we’re not out of the woods yet,” Bank of America analysts said in a note Sunday morning, warning of further headwinds for stocks.
In the past five recessions, the S&P 500 has only bottomed after earnings estimates for the index have been revised down – with the exception of 1990 when forward EPS was flat – but the reductions in estimates are just beginning, BofA pointed out.
“Our bull market indicator signs also indicate that it is premature to call a bottom,” the analysts said, adding that historical market bottoms occur when 80% of a bottom’s indicator signs are triggered. up from just 30% currently and that bear markets usually end. only after the Fed begins cutting rates – a move likely in at least six months.
Investors are expecting another busy week of economic data and corporate earnings. The Labor Department’s July jobs report is the major event of the week, with data released on Friday expected to show nonfarm payrolls rose by 250,000 in July.
Meanwhile, 150 other S&P 500 companies are on deck to report their second-quarter results.
While some earnings have been better than expected, among about 56% of companies that have reported results so far for the second quarter, earnings have only exceeded estimates by 3.1%, below the five-year average. by 8.8%, according to FactSet data. To research.
Releases from companies including Aflac (AFL), Activision Blizzard (ATVI), Pinterest (PINS) and World Wrestling Entertainment (WWE) are available Monday.
Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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