US Stock Markets in the Tension Field of Quarterly Earnings and Economic Data

U.S. stock futures were mixed on Monday as investors looked forward to an eventful week with quarterly reports and key economic indicators. Market participants hope for insights into the condition of the U.S. economy, the world's largest economy. While Dow E-minis fell by 35 points or 0.08%, S&P 500 E-minis gained 5.75 points or 0.10%, and Nasdaq 100 E-minis rose by 30.5 points or 0.15%. The positive momentum began with strong results from leading financial institutions such as JPMorgan Chase, Wells Fargo, and BlackRock on Friday. These corporate earnings drove the Dow Jones Industrial Average and the S&P 500 to new record highs. The high valuation of stocks—with the S&P 500 trading at 21.7 times earnings compared to the long-term average of 15.7—poses a challenge for companies to meet high expectations. According to Marc Ostwald from ADM Investor Services International, investors' focus this quarter is on profit margins, labor costs, and investments in artificial intelligence. A key question is to what extent companies are holding back on investments due to political uncertainties ahead of the U.S. elections. This week, 41 S&P 500 companies, including Bank of America, Citigroup, Johnson & Johnson, and Netflix, are set to release their results. Year-over-year comparisons suggest an earnings growth of 4.9% in the third quarter. Traders are also awaiting important economic data, particularly retail sales for September, which are due on Thursday and are expected to provide insights into the financial strength of U.S. consumers. Another focus is on interest rates, as expectations of a significant rate cut of 50 basis points by the Federal Reserve in November have decreased. However, the likelihood of a 25 basis point cut remains high, estimated at 90%. Two additional rate cuts are expected later in the year. Among individual stocks, Boeing stood out, with its stock price falling by 1.9% pre-market after the company reported a higher third-quarter loss and announced the elimination of 17,000 jobs and delays in the delivery of the 777X. B. Riley Financial, on the other hand, saw a 19% jump in its stock price after it was announced that the company would sell its subsidiary Great American Group to Oaktree Capital for approximately $400 million. Federal Reserve officials Christopher Waller and Neel Kashkari are also in focus for expected public statements on that day.