Surprise Beats: Stocks look to open higher Monday morning, following the trend after last week’s strong week. The S&P 500 rose 2% last week, while the Nasdaq 100 rose 2.5%. Surprise beats from companies reporting earnings helped propel stocks, and investors gear up this week for more earnings reports and economic data.
According to FactSet, about 70% of companies that have reported earnings this quarter have beat expectations. Speaking of expectations, there will be a lot of crucial economic data points coming out this week. On the docket, we will be getting new home sales Tuesday morning, FOMC Fed Funds Target Rate Wednesday (expectation is .75% hike), jobless claims Thursday morning and PCE Friday morning.
All Eyes On Fed: The Fed announcement on Wednesday will be seen as a crucial one. According to the CME Watch tool, the expectation is for another .75% rate hike. After June’s CPI print came in higher than expected, the CME Watch tool showed a strong uptick in the probability that the Fed would raise rates by a full percent, but those odds have since reversed to favor the .75% hike.
Energy and financials look to have a strong day, with major bank stocks trading higher premarket. The XLF and XLE, ETFs that track the financial and energy sector respectively, are each up about .75% before the open.
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