U.S.equity futures crept higher early Monday as stocks attempted to sustain momentum from their first big rally of the year last week.
Futures tied to the S&P 500 ( ^GSPC ) rose 0.4%, while futures on the Dow Jones Industrial Average ( ^DJI ) added 95 points, or 0.3%.Contracts on the technology-heavy Nasdaq Composite ( ^IXIC ) were up 0.4%.
Shares of Bed Bath & Beyond ( BBBY ) gained 19% in pre-market trading — at one point ripping as much as 75% higher — after wiping out nearly half of their value last week after the embattled meme-stock retailer said bankruptcy was on the table as it grapples with financial woes.Bed Bath & Beyond is set to report earnings on Tuesday.
Alibaba ( BABA ) shares climbed around 5% ahead of the open, rising for a sixth straight day, after co-founder Jack Ma agreed to give up controlling rights of fintech affiliate Ant Group.
Lululemon ( LULU ) warned Monday morning it expects fourth-quarter gross margins to decline as the company struggled with increased costs due to an inflation-related slowdown in consumer spending.Shares tanked 12.5% in the early trade.
In other markets, the U.S.
dollar continued a slump.Oil, meanwhile, rallied to start the week over optimism around demand as China reopens.West Texas Intermediate (WTI) crude futures, the U.S.benchmark, surged 3.% Monday morning to top $76 per barrel.
Investors await December’s Consumer Price Index (CPI) due out Thursday – arguably the most important economic release of the month and the last significant reading before Federal Reserve officials meet Jan.31-Feb.
1 to deliver their next interest rate increase.Wall Street will also face the first batch of earnings of the upcoming reporting season from Wall Street’s megabanks at the end of the week.
All three major U.S.
indexes soared on Friday , propelled by signs of cooling wage growth in the latest monthly jobs report .The S&P 500, Dow, and Nasdaq all surged at least 2% in the previous session.For the week, the S&P 500 and Dow Jones Industrial Average each advanced roughly 1.5%, while the technology-heavy Nasdaq Composite rose 1%.
Story continues Nonfarm payrolls rose by 223,000 in December as the unemployment rate dropped to 3.5%.The figures show a persisting imbalance between labor supply and demand, but investors cheered easing wage pressures as a sign the Fed may reconsider its ambitious rate-hiking path.
“No doubt the labor market has been able to withstand prolonged rate hikes better than many expected,” Mike Loewengart, head of model portfolio construction at Morgan Stanley’s Global Investment Office said in emailed comments.“Remember, though, that monetary policy acts on a lag so it’s likely an if and not a when for a slowdown in hiring.”
“The Fed minutes made it clear that rates will remain high for all of 2023, so investors should prepare for a bumpy ride, especially as we enter earnings season and get a glimpse of guidance in the coming weeks.”
Traders work on the trading floor at the New York Stock Exchange (NYSE) in New York City, U.S., January 5, 2023.REUTERS/Andrew Kelly Monday will also officially commence the first week of fourth-quarter earnings season, with JPMorgan ( JPM ), the largest consumer bank in the U.S., paving the way for what’s poised to be a milder period for corporate financials than usual as companies grapple with pressures from inflation and higher interest rates.
Wall Street analysts have been steadily trimming earnings estimates for S&P 500 companies over the final months of 2022.
During the past quarter, analysts have lowered their EPS forecasts by a larger than average margin of 6.5% from September 30 to December 31, according to data from FactSet Research.
By comparison, the average downward revision to bottom-up EPS estimates over a quarter was 2.5% over the past five years, 3.3% over the past 10 years, and 3.8% over the past 20 years, per FactSet.
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Alexandra Semenova is a reporter for Yahoo Finance.Follow her on Twitter @alexandraandnyc
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