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U.S. Stock Futures Eye Fifth Straight Month of Gains

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U.S. stock futures are poised for another positive month as investors remain optimistic about corporate earnings. Here’s a look at how stock-index futures are trading:

S&P 500 Futures (ES00)

  • Current level: 4605
  • Change: -1 point, 0% change

Dow Jones Industrial Average Futures (YM00)

  • Current level: 35594
  • Change: +2 points, 0% change

Nasdaq 100 Futures (NQ00)

  • Current level: 15385
  • Change: -12 points, -0.1% change

On Friday, major U.S. stock indices closed higher. The Dow Jones Industrial Average increased by 177 points or 0.5% to reach 35459. The S&P 500 climbed by 45 points or 0.99% to reach 4582, while the Nasdaq Composite gained 267 points or 1.9% to reach 14317.

With a calm start to the week, U.S. stocks are on track to achieve a fifth consecutive month of gains. The S&P 500 has surged by 15.4% over this period and is up by an impressive 19.3% for the year to date. Encouraging signs of cooling inflation have instilled confidence that the U.S. economy can avoid a sharp contraction as the Federal Reserve approaches the end of its monetary tightening measures.

Market Sentiment and Earnings Season

Supporting the positive market sentiment is a well-received second-quarter earnings season. As per FactSet data, out of the S&P 500 companies that have reported their results, a striking 80% of them delivered a positive earnings per share surprise and 64% reported a positive revenue surprise.

Earnings Reports Update

Scheduled to release their quarterly earnings on Monday are the following companies:

  • SoFi Technologies (SOFI) with a 5.06% increase
  • ON Semiconductor (ON) with a 2.92% increase
  • CNA Financial (CNA) with a -0.72% decrease

Revised S&P 500 Year-End Targets

Citi’s equity strategist, Scott Chronert, has revised his year-end targets for the S&P 500 index in 2023 and 2024. He now sets the target for 2023 at 4,600 and for 2024 at 5,000. Chronert explains that the new targets reflect increased probability of a soft landing in their scenario approach. He further emphasizes the expectation of stronger earnings growth leading into 2024.

Focus on Buying Pullbacks for Future Acceleration

Chronert advises clients to pay attention to the mega-cap growth cohort, which has contributed to an index P/E above their fair value range. As a result, he suggests utilizing pullbacks as an opportunity to position for an acceleration in earnings growth in 2024.

Upcoming Economic Updates

On Monday, the following U.S. economic updates are scheduled to be released:

  • The Chicago business barometer for July will be released at 8:30 a.m.
  • The Fed senior loan officer survey for the second quarter is due at 2 p.m. (both times Eastern).

These updates provide valuable insights into the current state of the U.S. economy.

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