Both the S&P 500 and the Dow Jones Industrial Average hit new record highs on Friday, ending six straight weeks of gains.
The S&P 500 rose 0.40% to end at 5,864.67, while the Dow added 36.86 points, or 0.09%, to end at 43,275.91. The Nasdaq Composite, boosted by Netflix’s (NASDAQ:NFLX ) strong post-earnings performance, rose 0.63% to close at 18,489.55.
All three indices marked their sixth consecutive week in the green. For the S&P 500 and Dow, this marked their longest winning streak since 2024, with weekly gains of 0.85% and 0.96%, respectively. The Nasdaq also advanced 0.80% for the week.
For this week, investors’ attention will be focused primarily on new financial data and several major earnings reports.
According to UBS strategists, the week’s claims data is expected to remain volatile, while upcoming flash PMIs from S&P and Markit are expected to offer a first look at economic activity in October.
In addition, economists expect September’s durable goods report to “show softness,” UBS notes. “This data could also provide insight into the potential impact of Boeing’s (NYSE:BA) production shutdown,” the bank added.
In addition, the Federal Reserve’s Beige Book will provide updates from various regional areas, possibly on the impact of recent hurricanes, which could be highlighted in Richmond surveys next Tuesday.
Several Fed officials are also scheduled to speak this week, offering potential insights into how recent economic data has shaped their views.
With earnings season underway for the tech sector, Tesla will report
More than 70 S&P 500 companies have reported results so far this earnings season, with 75% beating expectations, according to FactSet.
Shares of Netflix jumped 11% on Friday after beating Wall Street estimates for both profit and revenue in the third quarter. The company also reported a 35% increase in ad subscriptions compared to the previous quarter.
Meanwhile, Procter & Gamble (NYSE:PG) posted earnings that beat forecasts, although revenue came in below expectations.
Ahead of this week, the spotlight will be on several key earnings reports, with Tesla Inc (NASDAQ:TSLA) being the most anticipated.
Analysts at Barclays believe the focus for the electric vehicle (EV) giant will return to fundamentals, although they also raise lingering questions about the volume outlook and margin recovery path.
For the third quarter, they expect Tesla to beat earnings estimates due to “margin improvement, operating expense reductions and possibly also from steady credit proceeds from regulators.”
“Overall, after a series of strongly negative revisions to earnings estimates, Tesla’s estimates have largely stabilized,” they said.
Overall, the Barclays team believes Tesla’s third-quarter results could be a near-term catalyst for the stock, particularly after the sell-off following the Robotaxi day.
The outlook beyond the third quarter remains more uncertain, they added.
Other major companies to report earnings this week include General Motors Company (NYSE:GM ), Verizon (NYSE:VZ ), AT&T (NYSE:T ), Coca-Cola (NYSE:KO ), Boeing, IBM (NYSE: IBM), and ServiceNow (NYSE:NOW), among others.
What analysts are saying about US stocks
Deutsche Bank: “The recent rally has been incredibly strong, but it is likely to have increasing headwinds from here. The S&P 500 is on track for consecutive annual gains of more than +20%, something we haven’t seen since 1997-98, so generating further returns on this scale looks difficult looking at history. Credit spreads are also around their lowest levels in years, so this is a market that is in quite a bullish state right now. However, despite this headline strength, we also know that investors have been quite nervous of late, as seen with the market turmoil in early August. So if there was another negative growth surprise or some geopolitical shock, it’s not hard to imagine another sell-off.”
Wedbush: “We expect a strong Q3 tech earnings season starting this week as overall
Steady business spending, a recovery in digital advertising and the AI revolution will drive tech stocks higher at the end of the year in our view.”
“We believe the stage is set for tech stocks to see another 20% move higher in 2025, with this tech market just entering its next phase with the AI revolution.”
Goldman Sachs: “We estimate that the S&P 500 will deliver an annual nominal total return of 3% over the next 10 years and about 1% on a real basis. Annualized nominal returns between -1% and +7% represent a range of possible outcomes around our key forecasts and reflect the uncertainty inherent in predicting the future.”
“We expect the structure of the stock market performance to widen in the future.”
RBC Capital Markets: “We’re seeing some good signs for the rotation trade from the Mega Cap Growth names so far. The pace of upward revisions to EPS estimates continues to favor the largest market-cap names in the S&P 500, but to a lesser extent than has been seen in recent months.”
Morgan Stanley: “eps beats are rewarded more significantly compared to the previous 4 quarters. This is important because the 3Q EPS consensus estimate fell significantly in the 3 months leading up to earnings season (-4%) due to cyclical industries. In other words, the bar has been lowered in the earnings period specifically for cyclical pockets, and stocks are being rewarded for clearing that lowered bar.”
At Bro In Finance, we are committed to helping traders navigate the complexities of the forex market. Our in-depth analysis, expert insights, and advanced tools empower you to make informed decisions and achieve your trading goals. Whether you’re a beginner or an experienced trader, Bro In Finance is your trusted partner in mastering the forex market. Visit our website for more trading tips and strategies to enhance your trading experience.
Check out our on Best Forex Brokers to know more about this topic
Check out the most crucial steps that you need to take when choosing your forex broker
Have you heard about an amazing Broker Platform called “AVATRADE“? We at Bro In Finance do recommend this amazing broker.
Check out here to figure out the best funded trader program: Which Funded Challenge is Best
Reference;
Karaahmetovic, V. (2024) Dow Jones, Nasdaq, S&P 500 weekly preview: Tech earnings underway, Tesla in focus By Investing.com, Investing.com. Investing.com. Available at: https://www.investing.com/news/stock-market-news/dow-jones-nasdaq-sp-500-weekly-preview-tech-earnings-underway-tesla-in-focus-3672657 (Accessed: 21 October 2024).
