Investing.com — US stock futures were muted on Monday after the S&P 500 and Dow Jones Industrial Average notched fresh record closes in the prior session thanks in large part to higher-than-expected earnings from two big Wall Street banks. More results are due out this week, including figures from streaming video titan Netflix (NASDAQ:NFLX). Elsewhere, Boeing (NYSE:BA) is reportedly preparing to deliver more details about planned job cuts as the jetmaker grapples with a financially-damaging work stoppage.
1. Futures muted
US stock futures hovered around the flatline on Monday, with investors gauging upcoming corporate earnings and economic data this week.
By 03:26 ET (07:26 GMT), the Dow futures contract and S&P 500 futures were mostly unchanged, and Nasdaq 100 futures had fallen by 11 points or 0.1%.
On Friday, the benchmark S&P 500 and 30-stock Dow Jones Industrial Average logged record closes, buoyed by better-than-anticipated results from Wall Street banking giants JPMorgan Chase (NYSE:JPM) and Wells Fargo. Asset manager Blackrock (NYSE:BLK) also unveiled an all-time peak in assets under management.
Along with outpacing expectations, analysts at Vital Knowledge said the returns helped bolster confidence that the US economy is on track for a so-called “soft landing,” in which a period of elevated interest rates successfully quells inflation without igniting a sharp downturn in the labor market or broader economy.
2. Earnings season kicks into gear
More big banks are due to report in the coming week, including Bank of America and Citigroup on Tuesday, while Netflix is due to report after the close on Thursday.
Investors will be closely watching results from Netflix — specifically whether the streaming service is adding or losing customers and at what pace — for insights into the state of consumer spending.
Companies will need to top expectations for profit growth in their quarterly reports to support the stock market’s valuation, which stands well above its historical average.
Third quarter earnings results should confirm that large-cap corporate profit growth remains solid, analysts at UBS said in a note on Friday. “Now that the Fed has started its rate-cutting cycle, the economy should get a further boost from lower interest rates on things like credit card debt and business loans.”
3. Boeing job cut details expected – reports
Managers at Boeing are due to find out more details on Monday about the aerospace giant’s plan to slash around 17,000 positions, media reports have said.
The cuts, which will amount to 10% of Boeing’s global headcount, will reportedly have an impact on roles around the business and include employees, managers and staff. The firm will also delay the first deliveries of its 777X plane by a year and book $5 billion in losses in the third quarter, according to the reports.
Boeing Chief Executive Kelly Ortberg told employees on Friday that “tough decisions,” such as structural changes, will be needed to bolster the performance of the wider group and ensure its long-term competitiveness.
Ortberg has been attempting to navigate Boeing through a prolonged strike by workers in the US Pacific Northwest that is leading to heavy expenses and placing its bond rating in jeopardy of slipping into junk territory. Analysts have said that the company will need to raise at least $10 billion in fresh financing to shore up its finances.
4. Chinese stocks rise despite middling stimulus cues, weak inflation data
Chinese stocks brushed off initial volatility and clocked gains on Monday, rising even as the government provided middling cues on fiscal stimulus and inflation data underwhelmed.
China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes closed higher by 1.9% and 2.1% respectively. The two were choppy in morning trading.
Hong Kong’s Hang Seng index, which has more exposure to foreign investors, fell 0.1%, trimming a bulk of its initial losses after falling more than 2% earlier.
China’s finance ministry said in a weekend briefing that it will implement fiscal stimulus measures, including more debt issuance and support for provincial governments. But the government did not provide key details on the timing and scale of the plans.
Calls for more aid from Beijing were further boosted by weaker-than-expected Chinese consumer and factory price inflation in September.
5. Oil slips amid China woes
Oil prices fell sharply Monday, retreating after the Chinese inflation data and fiscal stimulus plans raised doubts about the health of the country’s economy.
By 03:27 ET, the Brent contract dropped 1.6% to $77.78 per barrel, while U.S. crude futures (WTI) traded 1.7% lower at $74.30 a barrel.
Figures released over the weekend showed consumer price growth in China unexpectedly eased in September, while producer prices marked nearly two years of contraction — data which bodes poorly for demand in the world’s biggest oil importer.
A monthly report from the Organization of the Petroleum Exporting Countries is due later in the day and is likely to provide more cues on supply, while the Middle East conflict remains in focus.
