Futures drop to start the week with key inflation data and upcoming earnings

Stock futures fell on Monday morning as markets exited a turbulent week and traders look forward to upcoming major reports next week that could provide insights into the health of the economy.

Futures contracts linked to Dow Jones Industrial Average Slip 0.44% or 130 pips. Standard & Poor’s 500 Futures fell 0.51%, while Nasdaq 100 futures fell 0.52%.

Market watchers generally consider next week to be the start of earnings season, with four of the world’s largest banks – JP MorganAnd the Wells FargoAnd the Morgan Stanley And the City Friday report. PepsiCoAnd the Delta And the Domino’s It is also among the companies reporting next week.

Inflation will take center stage as new monthly CPI data comes out Thursday morning.

A week of strikes will follow for market participants. The first half brought a comfortable rally that pushed the S&P 500 up more than 5% in its biggest gain in two days since 2020.

But the jobs data that economists say will do Keeping the Fed on its way to keep raising interest rates And the OPEC + decision to cut oil supplies Investors worried, dampening gains later in the week. At the close of day trading on Friday, the S&P was up 1.5% compared to where it started the week. The Dow and Nasdaq rose 1.5% and 0.7%, respectively.

Still, the Dow, the S&P 500 and Nasdaq It was a positive first week in the last four. However, they are all still significantly lower so far in 2022, and the Nasdaq is less than 1% away from its 52-week low.

Meanwhile, the 2-Year Treasury Bond Yield It rose 6 basis points to close at 4.316%. One basis point is equivalent to 0.01%.

“The trend in the stock market is likely to be lower because the economy and corporate earnings will slow significantly or the Fed will have to raise interest rates higher and keep them higher for longer,” said Chris Zaccarelli, chief investment officer. An officer of the Coalition of Independent Advisers on Friday.

“Given the conditions under which we are operating, we believe it is wise to start preparing for a recession,” he added. Talking about shallow stagnation, which is now the daily narrative, seems to us eerily similar to last year’s ‘temporary inflation’ narrative.

Last week brought mounting fears that corporate earnings will show the ugly side of a rising dollar Levi Strauss It has become newer than the steering parts due to the slippage of international sales.