Traders on the floor of the New York Stock Exchange on Aug. 4, 2022.
Source: NYSE
Stock futures were flat in overnight trading Monday as investors awaited key corporate earnings and the beginning of the Federal Reserve’s policy meeting.
Futures on the Dow Jones Industrial Average dipped 45 points. S&P 500 futures and Nasdaq 100 futures both traded 0.1% lower.
Quarterly results from Merck, Pfizer, PayPal, Procter & Gamble and JetBlue before the bell Tuesday could dictate market sentiment during the session. Investors will also watch closely for numbers from Microsoft, Advanced Micro Devices and Starbucks after the closing bell.
So far, more than 40% of the S&P 500 companies have reported their results with 79% posting earnings that exceeded Wall Street expectations, according to LSEG. That compares to a five-year average earnings beat rate of 77%.
“Both 2024 and 2025 consensus EPS are holding up, with 2024 EPS tracking a typical non-recessionary year revision trend. This suggests that analysts are relatively comfortable with their estimates,” Savita Subramanian, Bank of America’s head of U.S. equity and quantitative strategy, said in a note. “Corporate
commentaries are also relatively sanguine.”
The Fed’s two-day policy meeting is set to begin Tuesday where central bank Chief Jerome Powell could signal the timing and number of rate cuts expected in the next few months. The Fed previously projected only one rate cut for the remainder of 2024, and traders have priced in a 100% chance for a September rate reduction, according to the CME FedWatch Tool.
“Inflation is trending lower, supporting Federal Reserve rate cuts,” said Seema Shah, chief global strategist at Principal Asset Management. “This, coupled with a still robust economic outlook and strong corporate earnings, should bolster risk assets and lead to a broadening of returns away from just technology.”
U.S. homebuilding stocks growing ‘more squeezable’ as buying momentum mounts, S3 Partners says
Homebuilding stocks “should become more squeezable as increased consumer housing demand drives long buying momentum and stock prices,” according to a recent note from S3 Partners’ managing director of predictive analytics Ihor Dusaniwsky.
That trend has probably already begun, with S3 observing “a trickle of short covering over the last seven days with $40 million of Homebuilding shares bought-to-cover.”
“We should see a reversal of the short selling activity we have seen over the last 30 days due to the large mark-to-market losses short sellers have incurred,” Dusaniwsky wrote. Short positions in homebuilding stocks have lost $959 million on a year-to-date, mark-to-market basis, or almost 18%, S3 said. More than 60% “of every Homebuilding shorted stock was an unprofitable trade in 2024,” the researcher, which specializes in tracking short sales, said.
The $2 billion SPDR S&P Homebuilders ETF is higher by more than 16% so far in July and nearly 23% in 2024. The S&P 500 is little changed in July and ahead 14.5% in 2024.
SPDR S&P Homebuilders ETF in 2024.
— Scott Schnipper
Tech stocks could find support ahead, UBS says
The tech sector may soon find some support, according to UBS.
Mark Haefele, investment chief at UBS Global Wealth Management, anticipates that the recent market volatility could continue as investors continue to dump tech stocks for other interest rate sensitive assets. The Nasdaq Composite is the lone major index headed for a losing month.
However, he added the recent pullback could soon result in an attractive entry point for the sector. Over the past decade in markets history, there has been at least one 10% correction in global tech every year, and bounce back in the six months afterward. The one notable exception is during the 2017 bull market.
“We think the tech sector should find support in the coming weeks and resume its leadership,” Haefele wrote. “In fact, the recent pullback creates a reentry opportunity, in our view, especially for those companies with strong earnings growth visibility.”
— Sarah Min
Investors are punishing stocks that miss earnings more than normal
Companies with disappointing quarterly results are getting punished more than usual this earnings season.
Second-quarter earnings misses have resulted in an average 3.8% decline for a stock from two days before the quarterly release through the two days after the report comes out, according to FactSet. That is compared to the five-year average price decrease of 2.3% during this same window for companies that disappointed.
The ones that beat Wall Street expectations have been rewarded less than average. They are seeing only a 0.3% rise during that same period, per FactSet. That is compared to a five-year average price increase of 1%, FactSet said.
— Yun Li
![i’m-nervous,-too!-[part-2]](https://10xwealthreport.com/wp-content/uploads/2026/03/177042-im-nervous-too-part-2-1568x784.jpg)
