Earnings season may have made a decent start last week, but numbers released yesterday underlined the fact that it’s an increasingly mixed bag out there. Bank of America impressed, but Netflix received a less enthusiastic response after noting it expected a tougher quarter ahead. Industrial heavyweight Alcoa, PepsiCo and Morgan Stanley are amongst Wednesday’s highlights and have the potential to again provide further direction for the market.
Questions continue to be asked as to what the Federal Reserve will do next. Better than expected Chinese growth data overnight may offer some indication that the global slowdown isn’t quite as bad as some may be portraying, although political pressure continues to mount on the FOMC to take a more dovish line. Any comments from Fed board members speaking during the day ahead will be closely followed for further clues here. Anything that serves to weaken the dollar, be that by way of data releases or prospective changes to monetary policy, has the potential to bolster stocks further and with benchmark US indices closing in on fresh record highs, this remains a factor worth following.
Ahead of the open the market is pricing the DOW to open up 12 at 26465 and the S&P up 4 at 2911.
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Ongoing rate curve repricing and risk asset reaction perfectly illustrate how worryingly reliant investors have become on easy money policies