Stocks May Lack Direction As Earnings Season Picks Up Stream – U.S. Commentary

Stocks May Lack Direction As Earnings Season Picks Up Stream – U.S. Commentary

April 22, 2019

With earnings season set to pick up steam this week, stocks may show a lack of direction in early trading on Monday. The major index futures are currently pointing to a roughly flat open for the markets, with the Dow futures down by just 9 points.

Traders may be reluctant to make significant moves ahead of the release of quarterly results from a slew of big-name companies in the coming days.

Bank of America (BAC), Johnson & Johnson (JNJ), IBM (IBM), Morgan Stanley (MS), PepsiCo (PEP), and American Express (AXP) are among the companies due to report their results this week.

Financial giants Citigroup (C) and Goldman Sachs (GS) released their quarterly results this morning and are moving in opposite directions in pre-market trading.

Shares of Citigroup are seeing some pre-market strength after the company reported first quarter earnings that exceeded analyst estimates.

On the other hand, Goldman Sachs may see initial weakness after reporting better than expected first quarter earnings but revenues that missed expectations.

The impending release of data on industrial production, retail sales, and housing starts may also keep some traders on the sidelines along with the holiday on Friday.

In economic news, the New York Federal Reserve released a report showing growth in regional manufacturing activity picked up somewhat in April but remained fairly subdued.

The New York Fed said its headline general business conditions index climbed to 10.1 in April after falling to 3.7 in March, with a positive reading indicating growth in regional manufacturing activity. Economists had expected the index to rise to 6.0.

Stocks did not see much follow-through on an initial upward move but remained mostly positive throughout the trading session on Friday. The gains on the day lifted the Nasdaq and the S&P 500 to their best closing levels in over six months.

Reflecting late-day strength, the major averages finished not far off their best levels of the session. The Dow jumped 269.25 points or 1 percent to 26,412.30, the Nasdaq rose 36.80 points or 0.5 percent to 7,984.16 and the S&P 500 advanced 19.09 points or 0.7 percent to 2,907.41.

For the week, the Nasdaq and the S&P 500 climbed by 0.6 percent and 0.5 percent, while the Dow edged down by less than a tenth of a percent.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Monday. Japan’s Nikkei 225 Index surged up by 1.3 percent, while Hong Kong’s hang Seng Index fell by 0.3 percent.

The major European markets have also turned mixed on the day. While the U.K.’s FTSE 100 Index is down by 0.1 percent, the French CAC 40 Index and the German DAX Index are both up by 0.1 percent.

In commodities trading, crude oil futures are sliding $0.60 to $63.29 a barrel after rising $0.31 to $63.89 last Friday. Meanwhile, an ounce of gold is trading at $1,287.40, down $7.80 from the previous session’s close of $1,295.20. On Friday, gold rose $1.90.

On the currency front, the U.S. dollar is trading at 112.03 yen compared to the 112.02 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is valued at $1.1311 compared to last Friday’s $1.1299.

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