After jumping by more than 2% yesterday stock futures are looking to extend the rally on Friday morning, despite some disappointing earnings reports. The day ahead is pretty light with only an update on consumer confidence scheduled for release. Traders will determine if profit-taking will head to center stage now, or whether the nine-day rally is the start of a bigger climb.
The S&P 500 has climbed 11% in the past two weeks as a host of better-than-expected Q2 earnings reports buoyed sentiment. From the low point in early March, the benchmark index has now jumped 44%.
The morning so far has been mixed: Microsoft reported Q2 earnings of $0.34 per share, slightly below expectations of $0.36. Meanwhile, American Express said its quarterly earnings were $0.27 per share, slightly above the media forecast of $0.24. Earnings from Amazon came in with no surprises at $0.37 per share.
Only One Data Point to End the Week:
10:00 ― The week ends with an update on Consumer Sentiment. Preliminary results from Reuters & the University of Michigan indicated that sentiment fell substantially in July, but final results could be tamer given that oil prices have come down this month and the stock market has seen a major rally.
Mid-July results had sentiment falling more than 6 points to 64.6. Forecasters are putting the final result up, but only slightly, at 65.0.
“Looking ahead, the strengthening in equities ought to be worth a few points too, but the key issue is not so much the level of confidence but whether people can access credit so their spending reflects the confidence,” said HFE chief US economist Ian Shepherdson in a client note.