Stock market futures rallied Monday morning after President Donald Trump signaled that Saturday’s attacks on Syria were “mission accomplished.” Futures for the S&P 500 index, Dow Jones and Nasdaq 100 were pointing to solid gains at the open as investors look ahead to big earnings and other news this week.
Earnings season kicks into high gear, with Bank of America (BAC) just reporting better-than-expected first-quarter earnings. Netflix (NFLX) and Charles Schwab (SCHW) also are tap Monday. Meanwhile, Merck (MRK), Bristol-Myers Squibb (BMY) will present lung cancer trial data on their competing immuno-oncology blockbusters.
The S&P 500 index, Dow Jones industrial average and Nasdaq composite rallied strongly last week, though they retreated Friday. U.S.-listed China internet and school stocks were big losers while banks sold off despite seemingly good earnings from JPMorgan Chase (JPM), Wells Fargo (WFC) and Citigroup (C).
Given that the Nasdaq composite hit a record high a month ago with the Dow Jones and S&P 500 hitting near-term peaks, a large number of top-rated stocks have formed new flat bases. That includes Bank of America as well as Apple, Intel and other tech titans.
Netflix is the first FANG stock to report earnings. Charles Schwab kicks off online brokerage earnings, with two rivals due later this week. Merck and Bristol-Myers data offer the latest measuring stick for Keytruda and Opdivo.
Bank of America is the latest in a series of big bank earnings reports.
In addition to earnings, investors will get several notable economic reports this morning. The Commerce Department’s March retail sales and the New York’s April Empire State manufacturing index are due at 8:30 a.m. ET. The NAHB’s Housing Market Index is out at 10 a.m.
Stock Market Futures Rise
S&P 500 futures were 0.6% above fair value. Dow Jones futures climbed 0.6%. Nasdaq 100 futures rose 0.7%. Crude oil futures fell more than 1% after their best week in eight months.
The U.S. led airstrikes vs. Syria on Saturday for its alleged use of chemical weapons. But President Trump declared “Mission Accomplished” on Twitter.
A perfectly executed strike last night. Thank you to France and the United Kingdom for their wisdom and the power of their fine Military. Could not have had a better result. Mission Accomplished!
— Donald J. Trump (@realDonaldTrump) April 14, 2018
That suggests the president is unlikely to continue attacks that could have raised risks of a wider conflict including Russia and Iran. Trump’s focus seems to have left Syria, sending out several tweets blasting “slippery” ex-FBI Director James Comey. Still, U.N. Ambassador Nikki Haley said the U.S. would impose fresh sanctions on Russia over its support for Syria.
Remember that extended trading in stock market futures and individual stocks sometimes translates into regular session trading, but often does not.
Netflix, Bank of America, Charles Schwab, Merck and Bristol-Myers Squibb are all S&P 500 stocks.
Netflix Earnings Stream In
Wall Street expects adjusted first-quarter earnings per share of 63 cents, up 57.5%, with revenue soaring 40% to $3.69 billion, according to Zacks Investment Research. Netflix has predicted it would add 6.35 million streaming video subscribers for a global total of 123.93 million. It sees 1.45 million new U.S. subscribers and 4.9 million new overseas subscribers.
Several analysts raised price targets last week, bullish on Netflix’s growth. Its stock surged 7.9% last week, rebounding off its 50-day line. Netflix has been consolidating for a few weeks but does not yet have a proper base and buy point.
Bank of America Has A Buy Point
Bank of America has formed a flat base with a 33.15 buy point, but shares are trading below their 50-day line. BofA hit resistance at that key level Friday, reversing lower to fall 2.8% at 29.80.
BofA rose 0.7% in premarket trading.
Charles Schwab’s EPS should jump 38% to 54 cents as revenue grows 14% to $2.37 billion.
Schwab broke out March 9, but fell back below the buy point on March 14. The stock fell enough to invalidate that entry and has not yet formed a new base.
E-Trade Financial is in a buy zone, while Interactive Brokers has just formed a flat base.
TD Ameritrade (AMTD) has a flat base as well. TD Ameritrade, which also is on the IBD 50, will report earnings on April 24.
Merck, Bristol-Myers Lung Cancer Data
Last week Merck and Bristol-Myers Squibb announced positive results for their respective immuno-oncology drugs, Keytruda and Opdivo, in treating non-small lung cancer. They will provide clinical data from those trials at the American Association for Cancer Research annual meeting on Monday. The AACR event runs from Saturday through Wednesday.
Merck’s Keytruda has had the upper hand on Bristol’s Opdivo in recent years.
Merck on Sunday announced positive Keytruda results from a Phase III trial in melanoma patients.
The Dow Jones drug giant will hold an investor webcast Monday evening starting at 7:45 p.m. ET.
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