January 29, 2023

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Stock futures are rising as the week begins

Stock futures are rising as the week begins

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, December 7, 2022.

Brendan McDiarmid | Reuters

Stock futures rose on Monday after the major averages posted a second straight week of losses for the first time since September. Investors also struggled to shake off recession fears.

Futures linked to the Dow Jones Industrial Average rose 79 points, or 0.23%, while S&P 500 and Nasdaq 100 futures advanced 0.34% and 0.44%, respectively.

The moves came after another downward week for stocks The Fed raised the short-term interest rate by 50 basis points Higher rates are indicated for longer. Recession fears mounted as the central bank raised its forecast for future hikes above previous expectations, saying it now expects to raise interest rates to 5.1%.

Shares are set for a dismal month in December. On Friday, the Dow Jones fell 281.76 points, or 0.85%. The 30-share index fell 1.66% for the week, bringing its monthly losses to 4.83%. The S&P 500 fell 1.11% and declined 2.08% for the week, extending its monthly declines to 5.58%. The Nasdaq Composite fell 0.97% on Friday and 2.72% for the week. It is down 6.65% this month.

“Monetary policy is rapidly tightening now that the Fed has raised interest rates by 400 basis points in 9 months,” Ed Moya, chief market analyst at Oanda, wrote in a note to a client on Friday. “The risk of a recession will only increase now [Fed chair Jerome Powell] He noted that we should expect “continued increases”.

The National Association of Home Builders survey, which measures monthly sentiment, is due out Monday.

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Investors will also be watching for some earnings reports due later in the week. FedEx and Nike are both scheduled to report earnings results on the Tuesday after the market closes. As recession fears mount, earnings results will become more focused.

“Ranks and inflation may have peaked, but we see this as a warning signal for profitability, a fact we believe remains underappreciated but can no longer be ignored,” Michael Wilson, equity analyst at Morgan Stanley, wrote in a note Monday.