Dow Futures Gain Slight Before Big Week of Profits

U.S. stock index futures were slightly higher during Sunday night’s session, after major averages posted their best week in months into a stronger-than-expected earnings start to the season.

Futures contracts linked to the Dow Jones Industrial Average rose 40 points. S&P 500 futures rose 0.1%, while Nasdaq 100 futures gained 0.2%.

The large averages come out of a winning week. The Dow Jones rose 382 points on Friday, ending the week with a gain of 1.58% for its best week since June. The S&P 500 rose 1.82% last week for its best week since July, while the Nasdaq Composite had its best week since late August, with the technology-intensive index adding 2.18%.

In addition to better-than-expected earnings from Goldman Sachs on Friday, positive economic data also boosted stocks. Retail sales rose 0.7% in September, the Census Bureau said on Friday, while economists polled by Dow Jones expected a decline of 0.2%.

“Wall Street expected spending to slow, but it turns out the American consumer shouldn’t be bothered,” said Edward Moya, senior market analyst at Oanda. “Consecutive months of better-than-expected retail sales data show consumers looking strong as the holiday season approaches,” he added.

Profits season is now in full swing and a number of big names are expected to report in the coming week including Netflix, Johnson & Johnson, United Airlines and Procter & Gamble on Tuesday. Tesla, Verizon and IBM are among the other names on the bridge for the week.

So far, 41 components of the S&P 500 have released third quarter results, 80% of which are above BPA expectations, according to FactSet data. Including companies that have already released reports and estimates for the rest, third quarter profit growth will be 30%, the third highest quarterly growth rate for S&P 500 companies since 2010, according to FactSet.

Strong first week earnings results, including those from the biggest banks, pushed major averages a striking distance from their all-time highs. The Dow Jones is within 1% of its all-time high, while the S&P 500 and Nasdaq Composite are 1.6% and 3.3% respectively below their all-time highs.

As the earnings season is in full swing, investors will be watching for company comments on supply chain bottlenecks and inflation, among others.

“Growth in 2022 appears likely to be accelerated by the lagged effects of monetary stimulus, lagged effects of rising consumer net worth, reopening and restocking,” wrote Ed Hyman, president of Evercore ISI, in a note to clients on Sunday. “Supply chain problems are likely to ease and this year’s unmet demand will likely be met next year. Wages are expected to rise, boosting incomes for consumers,” he added.

Bitcoin retreated from its recent high, but held above $ 60,000 on Sunday, according to data from Coin Metrics, as the first bitcoin futures-traded fund prepares to start trading this week.

Bitcoin rose on Friday in anticipation of such an announcement. The world’s largest cryptocurrency topped $ 60,000 last week for the first time since April, trading as high as $ 62,307.

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