Stocks Head for Record Highs, Earnings Ahead -- and What Else Is Happening in the Stock Market Today - Barrons.com
DOW JONES & COMPANY, INC. 4:37 AM ET 11/1/2021
Symbol Last Price Change
DD 71.77up +2.17 (+3.1178%)
LYFT 46.33down +0.46 (+1.0028%)
QUOTES AS OF 12:22:27 PM ET 11/01/2021
The stock market was on track to hit record highs Monday, with strong corporate earnings boosting sentiment as investor attention turns to a key meeting of the Federal Reserve this week.
Futures for the Dow Jones Industrial Average indicated an open 60 points higher, after the index climbed 89 points Friday to close at 35,819. Futures for the S&P 500 and Nasdaq signaled a similar start. All three indexes ended Friday at new records.
Investor sentiment has been boosted by strong corporate earnings, which helped stocks shake off macro concerns and push higher in October to notch one of the best monthly gains this year.
As November trading got under way -- with the week ahead holding key economic releases covering manufacturing, services, and the labor market -- that positive mood seemed to be holding.
"Company results have thus far been fairly positive, and particularly encouragingly we've seen companies have been able to pass on price rises to consumers without any hint of demand destruction," said Michael Hewson, an analyst at broker CMC Markets.
"The resilience in the markets is all the more surprising given the amount of gloomy headlines about rising inflationary pressures, the impact of supply-chain disruptions, and their prospective impact on company profit margins and consumer disposable incomes," Hewson noted.
Companies reporting earnings in the first half of this week include BP , ConocoPhillips (COP), Cummins (CMI), DuPont(DD) , Pfizer (PFE), Lyft(LYFT) , T-Mobile U.S. (TMUS), and CVS Health (CVS).
Attention will turn later this week to the latest meeting of the Federal Open Market Committee (FOMC) -- the Federal Reserve's monetary-policy body. It's largely expected that the central bank will announce that it will begin slowing, or tapering, its Covid-19 pandemic-era program of monthly asset purchases, which add liquidity to markets, and markets could react to any substantial updates.
"I expect the FOMC to formally announce the start of its taper of quantitative easing, with the real question being, how much per month will it reduce, and will it show some spine and stay the course, even if markets correct lower," said Jeffrey Halley, an analyst at broker Oanda.
"I do not believe the Fed taper has been priced into markets and as U.S. earnings season winds down, the U.S. dollar and U.S. yields may rise, and equities may struggle to maintain their rarefied valuations, at least for the rest of Q4," Halley added.
Overseas, the Nikkei 225 in Tokyo was 2.6% higher, following national elections over the weekend that saw the ruling party retain its majority in the lower house.
"The election is an endorsement for the new prime minister [Fumio] Kishida, and markets are once again pricing in his promised fiscal stimulus package," said Halley.
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