Wall St set to open higher, eyes monthly gain on U.S. soft landing hopes
By Johann M Cherian and Bansari Mayur Kamdar
(Reuters) -Wall Street futures rose on Monday with key benchmarks set to end July higher on upbeat company earnings and hopes of a soft landing for a resilient U.S. economy, while cooling inflation fuels bets on a rate-hike pause.
Investors await quarterly reports from Apple (NASDAQ:AAPL), Amazon.com (NASDAQ:AMZN) and AMD later this week, while July ISM Manufacturing reading and three sets of employment data, including July's non-farm payrolls, are also in focus.
Second-quarter earnings for S&P 500 companies are now estimated to have fallen 6.4% year-over-year, according to Refinitiv data. While still negative, the forecast is an improvement from the 7.9% drop estimated a week earlier.
«We've wrapped up a solid month… and we're at a point in time where we clearly have seen enough of the earnings reports to know that they're going to come in better than feared,» said Art Hogan, chief market strategist at B Riley Wealth.
The tech-heavy Nasdaq led Wall Street higher last week as megacap growth companies such as Alphabet (NASDAQ:GOOGL), Meta Platforms as well as chipmakers Intel (NASDAQ:INTC) and Lam Research (NASDAQ:LRCX) posted strong quarterly earnings.
«Towards the end of the week you have economic data and if we were to see a plateau in manufacturing activity but not a collapse of job creation, that would that would clearly keep that soft landing narrative squarely on the table,» Hogan said.
Citigroup (NYSE:C) raised its 2023-end and mid-2024 S&P 500 targets to 4,600 and 5,000, respectively, to reflect a higher possibility of a soft landing.
The benchmark index closed at 4,582 on Friday, 4.9% away from its all-time intraday high hit on January 4, 2022.
Reflecting strong
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