U.S. stock index futures were about unchanged during overnight trading on Sunday, after the major averages posted their best week in months amid a stronger-than-expected start to earnings season.
Futures contracts that are tied to the Dow Jones Industrial Average lost just 23 points. S&P 500 futures fell 0.1% while Nasdaq 100 futures suffered 0.2%.
Major averages are celebrating a successful week. The Dow gained 382 points Friday to end the week with a 1.58% gain, its highest week since June. Last week, the S&P 500 gained 1.82%, its highest week since July. The Nasdaq Composite recorded its best week since August's end, with tech-oriented indexes adding 2.18%.
Stocks were also buoyed by Friday's better-than-expected earnings report from Goldman Sachs. According to the Census Bureau, retail sales increased 0.7% in September. Dow Jones economists had expected a decrease of 0.2%.
According to Edward Moya (Oanda senior market analyst), Wall Street had expected a slowdown in spending. But it turned out that the U.S. consumer was not to be trusted." He said that back-to-back months with better-than-expected retail sales data show that the consumer is strong going into the holiday season.
Earnings season has begun in earnest. A number of major names will report this week including Johnson & Johnson on Tuesday and United Airlines on Tuesday. The week's other big names include IBM, Verizon, and Tesla.
According to FactSet data, 41 S&P 500 components reported third quarter results. 80% of these companies exceeded EPS expectations. FactSet estimates that third quarter profit growth will be 30%. This is the third highest quarterly rate of growth for S&P 500 companies ever since 2010.
The major averages are within striking distance from their all-time highs due to strong results from the first week earnings. This includes the strongest banks. The Dow is now less than 1% away from its record high. Meanwhile, the S&P 500 Composite and Nasdaq Composite are respectively 1.6% and 3.3% lower than their records.
Investors will be paying attention to company comments about supply chain bottlenecks, inflation, and other issues as earnings season kicks into full swing.
In a Sunday note to clients, Ed Hyman, Evercore ISI Chairman wrote that growth in 2022 will likely be lifted by the lagged effects of monetary stimulus and the lagged impact of surging Consumer Net Worth. "Supply chain issues are likely to improve, and unfilled demand for this year's products is likely to be met next. He said that wages are expected to rise, which will increase consumer incomes."
According to Coin Metrics data, Bitcoin held above $60,000 on Sunday despite falling from its previous high. This week, the first bitcoin futures exchanged traded fund will begin trading.
In anticipation of such a listing, Bitcoin traded higher Friday. Last week, the world's most valuable cryptocurrency reached $60,000 and traded as high as $62,307.
