Important points to watch for US stocks:
This week, the market will focus on the latest U.S. inflation data, and the U.S. stock earnings season will also kick off this week.U.S. 10-Year Treasury Bond YieldComes to 3.357%. U.S. stock futures fell on Monday (10th),Dow JonesFutures fell 0.11%, S&P 500 futures fell 0.28%,Nasdaq 100 futures fell 0.63%.
The market will focus on the latest US inflation data this week, with the Labor Department releasing its March consumer price index (CPI) on Wednesday. Headline inflation, as tracked by the CPI, cooled sharply following hitting a 40-year high of 9.1% in June last year as the Fed raised rates aggressively. However, it remains well above the central bank’s target range.
Major U.S. banks and financial institutions will release earnings reports this week, including JPMorgan Chase, Wells Fargo, Citigroup, BlackRock and PNC Financial Services.
Revenue at S&P 500 companies is expected to drop 6.6%, which would be the biggest quarterly decline since the second quarter of 2020, according to FactSet. Of the companies that issued earnings guidance, 79 issued negative EPS guidance, while only 27 issued positive guidance.
After a turbulent first quarter, U.S. stocks have shown considerable resilience,S&P 500 IndexIt is up 7% so far this year, adding regarding $2.36 trillion in market capitalization, with 90% of that gain coming from just 20 leading stocks.
Among the top gainers in the S&P 500, chip maker Fidelity (NVDA-US) has risen regarding 88% so far this year, while Facebook parent Meta (META-US) rose 73 percent and Salesforce rose 43 percent.
According to data from global asset management firm Apollo Global Management,S&P 500 IndexThe top 20 stocks with a market capitalization increase of $2.05 trillion in the first quarter of 2023. The market value of Apple alone surged nearly $600 billion, or 30%, in the first quarter.andS&P 500 IndexThe market capitalization of the rest of the stocks will only increase by $320 billion over the same period in 2023.
If gains in large-cap growth stocks are excluded, the S&P 500 would rise just 1.4% in the first quarter of 2023, UBS said.
However, high inflation means the zero interest rate environment that drove tech stocks to record highs in 2021 is unlikely to return anytime soon, and the tech rebound may have tapered off. Analysts at Bank of America pointed out that in the five trading days ended March 31, technology stocks saw their first outflows in six weeks.
According to the latest survey by MLIV Pulse, most of the interviewed investors believe that the 20% increase in US technology stocks this year is decoupled from fundamentals. At the same time, they also expect that the first quarter earnings season will be frustrating, and technology stocks may face huge selling pressure in the short term.
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