Stock futures rise ahead of big week for tech earnings
By William Watts
Stock-index futures traded mostly higher Monday, finding support ahead of a busy week of earnings that features results from
Stocks ended mostly lower Friday but logged weekly gains, with the Dow rising 1.6% and the S&P 500 advancing 1.9%. The tech-heavy Nasdaq Composite ended Friday at a record, leaving it with a weekly rise of 4.2%.
Tech shares appeared set to continue leading the way higher as investors prepare for a busy week of earnings reports, with roughly a quarter of the S&P 500 due to release quarterly results (https://www.marketwatch.com/story/apple-tesla-and-facebook-ready-to-report-record-sales-in-busiest-week-of-earnings-11611435237), including
Key Words:Tech's 'last hurrah'? If hedge funds are any indication, it could be a big week for Apple, Amazon and other megacap favorites (https://www.marketwatch.com/story/techs-last-hurrah-if-hedge-funds-are-any-indication-it-could-be-a-big-week-for-apple-amazon-and-other-prominent-megacaps-11611515725?mod=home-page)
Large-cap tech-related companies have been the big winners of the COVID-19 pandemic, thriving from the stay-at-home environment, which was also seen accelerating a number of positive tech trends.
The rally has left valuations for large-cap tech shares stretched, fostering fears of a potential bubble. At the same time, investors remain positive about prospects for additional fiscal stimulus as President Joe Biden pushes for a $1.9 trillion package, though it faces difficult negotiations in a Senate where Democrats have a slim majority.
Stimulus expectations have seen investors look past worries over potentially more contagious variants of the virus that causes COVID-19 as well as snags in vaccine distribution, said Ipek Ozkardeskaya, strategist at Swissquote Bank, in a note.
"With all this, the S&P 500 finds solid support near the 3800 mark as investors can simply not have enough of the historical market rally. No one wants to jump off of the back of a running bull," Ozkardeskaya said. "So, despite the skyrocketing blue-chip prices, any downside correction to the big U.S. stock indices will likely be seen as interesting dip buying opportunities by investors."
And the Federal Reserve will hold its first policy meeting of the new year on Tuesday and Wednesday. While no policy moves are expected, Fed watchers expect Chairman Jerome Powell and fellow policy makers to signal a cautious but optimistic outlook while also reinforcing expectations the central bank won't be quick to ease up on monetary stimulus efforts.
See:Stock-market bulls brace for major gut check as earnings, Fed and GDP loom (https://www.marketwatch.com/story/stock-market-bulls-brace-for-major-gut-check-as-earnings-fed-and-gdp-loom-11611411473)
-William Watts; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
January 25, 2021 07:06 ET (12:06 GMT)
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