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The US stock market futures will always be an indication of how healthy the economy is at the time.
The United States stock market futures did not fare well with notable falls as investors are set to welcome the earnings season and important inflation data released this week. While the futures tied to the Dow Jones Industrial Average (INDEXDJX: .DJI) slipped by 201 points or 0.64%. S&P 500 (INDEXSP: .INX) futures fell 0.72% and Nasdaq 100 (INDEXNASDAQ: NDX) futures lost 0.85%.
While the slipped futures readings mimicked the bearish performances of the stock market indices including the S&P 500 and Dow Jones, the fall in the Nasdaq 100 does not reflect those of the Nasdaq Composite. The S&P 500 ended Friday’s session at an almost flat loss of 0.083% to 3,899.38.
The Dow Jones slumped by 0.15% to 31,338.15 while the Nasdaq Composite inked a 0.15% surge to close at 11,635.31. The growth in Nasdaq Composite (INDEXNASDAQ: .IXIC) comes off as its fifth consecutive growth, and all indices ended the past week in the positive region. The positive week reported was ignited in part by a strong job report that showed a part of the monetary tightening and inflationary increase is working.
For the now, the 2-year Treasury yield is holding above the 10-year yield. Should there be an inversion, it will signal the onset of an economic recession.
“While the markets ended in solid green for the week, investors should brace for continued volatility in July, with ongoing uncertainties looming with respect to inflation, Fed policy, recession concerns, and the enduring Russia-Ukraine war, all as we also move into corporate earnings season,” said Greg Bassuk, chief executive officer at AXS Investments.
Stock Market Futures amid Recessionary Fears
For what it is worth, the US stock market futures will always be an indication of how healthy the economy is at the time. With the positive job data report, and expected inflation growth, the Federal Reserve is likely to be more aggressive in its rate hike, a move if kept up with can fuel an inevitable slip into recession.
“With recessionary fears weighing on the markets, investors are hyper-focused on corporate earnings for greater clues about the health of corporate America and the broader US economy,” Bassuk said. “A sharper lens will be needed to dissect these earnings reports, as a strong second quarter might be accompanied by very conservative outlooks,” he added. “As commodity and other producer costs remain high, companies will be factoring in the extent to which those heightened prices can be passed on to consumers and, likewise, how to keep earnings vigorous amid economic, geopolitical, and other key headwinds.”
The earnings season is scheduled to kickstart this week with the likes of PepsiCo Inc (NASDAQ: PEP) and Delta Air Lines Inc (NYSE: DAL) billed to announce their earnings on Tuesday. The majority of US banks are bound to report by the end of the week with their performances lending additional insight into the health of the economy as a whole.