Futures for the S&P 500 and the Dow Jones Industrial Average dropped by 0.2 percent and 0.1 percent, respectively. In addition, there was a drop of 0.3% in Nasdaq Composite futures.
The rally began long before last week. On Monday, the S&P 500 is up 14 percent from its intraday low of the year, hitting in mid-June. The rally has been spurred by hopes of the Federal Reserve’s rate hikes, intended to curb economic demand and bring high inflation down.
Also, helping the rally has been a better-than-feared earnings season. At the same time, some companies have reduced guidance in light of the economic challenges, most beat estimates, and offer good-enough outlooks. As a result, almost seventy-five percent of the total value of the S&P 500 (see the derivative price) has been reported, and the aggregate earnings per share result have surpassed expectations by nearly 5 percent, per Credit Suisse.
Now, the market will focus on economic data and its implications for monetary policy. While a steady increase in hiring by U.S. businesses is welcome news for the markets, a slowdown in the rate at which jobs are being added is welcomed news if it means the Federal Reserve will be more cautious about raising interest rates.
“Last week the economy in Europe got a welcome dose of good news due to significantly better than expected economic numbers for Q2 GDP from France, Italy and Spain who all saw a huge improvement in economic output across the board. In France, the economy expanded by 0.5%, in Italy by 1% and in Spain by 1.1%” CMC Markets reports.
On Monday morning, these stocks are among those that have shown significant price changes.
After the Chinese tech giant stated in response to the possibility of being delisted by the Securities and Exchange Commission, Alibaba BABA –11.12 percent (ticker: BABA) gained 1.7 percent as investor sentiment improved. The firm has pledged to “make every effort to continue trading on the New York Stock Exchange and the Hong Kong Stock Exchange.”
Following the temporary averting of a strike at three plants that produce military gear, shares of Boeing BA +0.14 percent (BA) rose by 5.2 percent after the company’s plan for validating repairs to the 787 Dreamliner was approved by regulators.
In a combined report released Monday, Chinese electric vehicle manufacturers noted a decrease in July deliveries from the previous record-setting month of June. However, stocks were trading at a higher level. The stock prices of NIO, XPeng, and Li Auto were all higher by 3.5 percent.
On Monday, oil prices dropped as investors digested reports that the Democrats’ climate change measure could cost the oil industry as much as $25 billion. Among the major oil companies, Exxon Mobil (XOM) was down 0.8%, Chevron (CVX) was down 0.4%, and Shell (SHEL) was down 0.2%.
The stock of payment technology firm Global Payments (GPN) rose by 3% after it announced that it would acquire EVO Payments (EVOP) for $34 per share in cash. EVOA rose by 19%. Additionally, Global Payments’ adjusted earnings for the second quarter were higher than Wall Street predicted.
Shares of Target (TGT) rose by 2% after an analyst at Wells Fargo raised the stock’s rating from Equal Weight to Overweight.
Following a downgrade from Cowen to Perform from Outperform, shares of American Eagle Outfitters (AEO), a casual clothing retailer, fell 1.3%.