Traders work on the floor of the New York Stock Exchange during morning trading in New York City.
Stock futures were little changed in overnight trading Sunday as investors waited to assess whether the next batch of key corporate earnings could power the market to more records.
Futures on the Dow Jones Industrial Average traded neat the flatline. S&P 500 index futures were flat, while Nasdaq-100 futures dipped 0.1%. The bond market is closed on Columbus Day, but the stock market is open as usual.
JPMorgan Chase and Wells Fargo kicked off the third-quarter earnings season on a high note with strong results and their stocks rallied. The early signs of a recovery in banking profits helped push the broader market to all-time highs at the end of last week. The S&P 500 closed above 5,800 for the first time, while the blue-chip Dow also reached an all-time high.
Bank of America, Goldman Sachs and Johnson & Johnson report their latest results on Tuesday before the market opens, while Morgan Stanley and United Airlines are set to release results Wednesday. Walgreens Boots Alliance, Netflix and Procter & Gamble are also scheduled to post earnings this week.
Despite the market climbing to new heights, investors remain anxious against a backdrop of a closely-contested presidential election in three weeks, suddenly rising Treasury yields, uncertainty about the pace of Federal Reserve policy easing and escalating geopolitical risks in the Middle East.
But despite any headwinds, "[t]he Big 4 macro tailwinds (stimulus, resilient growth, disinflation, and healthy corporate performance) are all still in place and they're powerful enough to overcome rich valuations and geopolitical risks, keeping the SPX on an upward trajectory," Adam Crisafulli, founder of Vital Knowledge, said in a note Sunday.
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The S&P 500 has gained nearly 22% this year, excluding reinvested dividends. Treasury yields have risen lately too, with the benchmark 10-year note yield, used to calculate everything from mortgages to auto loans, topping 4.1% last week.
Money Report
On the data front, September retail sales and Sept. industrial production figures are out Thursday, followed by Sept. housing starts and building permits Friday.
China hints at increasing the deficit
China's Minister of Finance Lan Fo'an said in a highly anticipated press briefing Saturday that the central government has room to increase debt and the deficit, but noted such policies are still under discussion.
In the days leading up to the briefing, many investors and analysts had hoped that China was gearing up to unveil a major new stimulus package.
Hedge funds that recently flocked into Chinese stocks on stimulus hopes just did a 180 last week. Professional traders posted the largest single-day net selling of Chinese securities, both onshore and offshore, on Tuesday, according to Goldman Sachs' prime brokerage data.
— Yun Li, Evelyn Cheng
