Wall Street ends directionless ahead of major corporate results

Wall Street ends directionless ahead of important corporate results

UPDATE DAY

The New York Stock Exchange ended a tentative session on Monday on the eve of important quarterly results that could set the tone for the market.

According to final results, the Dow Jones index climbed 0.28% to 31,990.04 points and the S&P 500 gained 0.13% to 3,966.84 points. The technology-dominated Nasdaq dropped 0.43% to 11,782.67 points.

“The market lost its early trading gains and it was mainly the Nasdaq that weighed on the whole market,” said Peter Cardillo of Spartan Capital. “The reason for this is that investors are cautious ahead of the results of the big names in Tech,” he added.

While the week is one of the busiest in terms of company results , figures from megacaps Alphabet (Google, +0.14%) and Microsoft (-0.59%) are due Tuesday after the close.

In the wake of these expectations, all the big names in the sector ended in the red, from Facebook (Meta, -1.55%) to Amazon (-1.05%) via Twitter (-1.48%) and Netflix (-0.88%).

Securities of semiconductor manufacturers also ended in negative territory such as Nvidia (-1.70%) or AMD (-0.64%), pending a US Senate vote for $50 billion in support for the industry, which is suffering from supply chain difficulties.

In total, some 175 companies in the S&P 500 will publish their quarterly accounts this week “among the most important in the world”, enough to make investors anxious, pointed out analysts at Wells Fargo.

In addition to corporate earnings, markets will have their eyes on the Federal Reserve (Fed) monetary meeting which begins on Tuesday. The US central bank is expected to announce another 0.75 percentage point hike on Wednesday in a bid to curb inflation, according to the majority of operators.

“This 75 basis point increase is already taken into account by the markets”, noted Peter Cardillo, but according to him, “it is the results of companies which will set the tone for the stock market for the rest of the summer” .

Investors will also be watching crucial indicators of the US economy, starting with the first estimate of gross domestic product (GDP) in the second quarter due Thursday.

The world's largest economy was already in contraction in the 1st quarter (-1.6%). Technically, an economy is considered in recession after two consecutive quarters of negative growth.

US President Joe Biden nevertheless assured Monday evening that the country would not experience a recession.

His Treasury Secretary, Janet Yellen, also certified on Sunday that while the US economy was slowing, the economic data did not herald a recession. “A recession is a generalized contraction that affects many sectors of the economy. We just don't have that,” said the Minister of Economy and Finance.

Inflation for June measured by the PCE index, the Fed's favorite barometer, is also expected on Friday.

Stocks in the oil sector rebounded strongly in the wake of a rise in oil prices linked to the announcement by the Russian gas company Gazprom that it would drastically reduce gas deliveries to Europe from Wednesday.

Chevron took 2.97%, ExxonMobil 3.32% and ConocoPhillips 4.43%.

Walmart, the number of discount distribution, fell almost 8% after the close (-0.14% to 132.02 dollars), following its announcement of a drop in its profit forecast as inflation changes habits of its customers.

The title of the manufacturer of Weber barbecues descended into hell (-12.65% to 6.56 dollars), after posting a loss in the 2nd quarter and forecasting a drop in sales for the next, while its CEO leave the group.