S&P 500 set to hit new record at the open on strong earnings, trade-deal progress

U.S. stock index futures pointed to a banner session for Wall Street on Monday with the S&P 500 on track to hit a fresh all-time high at the open, lifted by strong earnings and progress on U.S.-China trade.

S&P 500 futures indicated a 0.2% gain to start off the trading day. Dow Jones Industrial Average and Nasdaq 100 futures also pointed to a higher open.

The broad index has been volatile since reaching its all-time high on July 26. Since then, the S&P 500 has posted 20 moves of at least 1% including three declines of more than 2.5% in August.


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However, the S&P 500 has been trading in a tight range since September, finding support around 2,900 while struggling to stay above 3,000.

“The technical backdrop improved last week as the SPX finally distanced itself from the magnetic 3,000-point level,” Craig Johnson, chief market technician at Piper Jaffray, said in a note. “A close above 3,026 will validate a record high breakout and likely open the door to a new leg higher.”

Sentiment was lifted at the start of the week by strong earnings from companies such as Walgreens Boots Alliance, AT&T and Spotify. Those three companies posted quarterly profits that exceeded analyst expectations. Walgreens and AT&T shares rose more than 1% each while Spotify gained nearly 6% in the premarket.

Those results continued a trend of companies surpassing analyst earnings estimates this reporting period. Of the 202 S&P 500 companies that have reported, 78%  have topped analyst expectations, according to FactSet.

Meanwhile, U.S. and Chinese officials said they were “close to finalizing” some parts of a trade agreement. Chinese state-run news agency Xinhua also pointed to progress being made on trade. The world’s two largest economies have imposed tariffs on billions of dollars’ worth of one another’s goods since the start of 2018, battering financial markets and souring business and consumer sentiment.

On the data front, advanced economic indicators for September and Dallas Fed manufacturing figures for October will be released prior to the market open.

Source: cnbc.com | Original Link

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