Stocks fall, rates rise ahead of big earnings week that includes Netflix and Tesla

0

Topline

The stock market fell on Monday – extending a recent streak of losses – as rates jumped ahead of a big week of quarterly earnings as investors remained nervous about the impact of soaring inflation on corporate earnings and consumer spending.

Highlights

Stocks added to last week’s losses, despite a late-day comeback: The Dow Jones Industrial Average fell 0.1%, less than 100 points, while the S&P 500 was flat and the Nasdaq Composite, very technological, lost 0.1%.

Yields on government bonds climbed again on Monday, with the closely watched 10-year Treasury note hitting 2.88%, its highest level since 2018, after trading below around 1.7% it barely two months ago.

Despite a decent start to the earnings season, with around 79% of the 38 S&P 500 companies reporting earnings so far above estimates, investor uncertainty remains high, inflation, rising rates and the war in Ukraine weighing on the markets.

Wall Street pundits are now increasingly warning that quarterly earnings are likely to be hit as soaring inflation drives up costs that will hurt both corporate profit margins and consumer spending.

Shares of brokerage firm Charles Schwab fell more than 10% on Monday after disappointing quarterly results, while Bank of America, meanwhile, reported slightly better-than-expected results as its stock rose more than 3%. %.

Tangent:

Twitter shares jumped more than 7% on Monday as tensions escalated between the company’s board and Tesla billionaire Elon Musk, who last week launched an unsolicited $43 billion bid to buy the social media platform. Monday’s stock gains come after Twitter’s board announced late Friday that it would adopt a “poison pill” plan to resist any hostile takeover attempts.

To monitor :

A host of big names will release their first quarter results this week, including Netflix on Tuesday, Tesla on Wednesday and Snap on Thursday. Several airlines, such as United and American, are also reporting this week, as well as Dow stocks like IBM, Procter and Gamble and American Express.

Further reading:

Calls for recession mount as inflation threatens corporate profits and rising costs hit consumers (Forbes)

Twitter board adopts poison pill to fend off Elon Musk takeover bidForbes)

Musk Says He Has “Sufficient Funding” To Buy Twitter, Says He Has “Plan B” If Bid Is Rejected (Forbes)

Experts think inflation may have “peaked,” but prices will remain high this year (Forbes)

Share.

Comments are closed.