Traders on the floor of the New York Stock Exchange, May 6, 2022.
Stock futures rose Sunday evening after a week of sharp losses that ended at a high, and ahead of a big earnings week for retail traders.
Futures linked to the Dow Jones Industrial Average rose 89 points, or 0.3%, while S&P 500 futures rose 0.4%. Nasdaq 100 futures jumped 0.6%.
On Friday, the Dow Jones rose 466.36 points, or 1.47%, while the S&P 500 rose 2.39%. The Nasdaq Composite Index jumped 3.82% and posted its strongest one-day gain since November 2020. However, the three averages posted a losing week.
The gains came as investors headed into a comfortable rally mode to finish off a bad week for stocks as the S&P 500 index fell almost into bear market territory.
However, it remains to be seen how long the rally will last or how far other stocks should drop before bottoms of this year’s downtrend.
“Given the history of bear markets, along with the fact that the Fed has just begun its rate-raising cycle and would like financial conditions to continue tightening until demand wanes further, this rally is likely to weaken,” said Quincy Crosby. , chief equity strategist at LPL Financial.
However, some investors and analysts say, whether the bottom is inside or not, there are good buying opportunities at current market lows.
“I’m not talking about bottoming here, but there are some opportunities here for dollar cost averaging,” Silvia Jablonsky, CEO and chief investment officer of Defiance ETFs, told CNBC. “If you are sitting on a handful of money, you are taking losses due to inflation. Investing in stocks or asset classes that you believe in…it is the lesser of two evils. Selling fatigue will diminish, and the market will reset. The Dow is unlikely to be S&P is in correction territory six months to a year from now.”
Retail earnings season kicks off this week with several large retailers set to report first-quarter results, including Walmart, Target and Home Depot. Elsewhere, Deere is also on board, along with a few tech companies.
Investors will also be watching retail sales data this week, which could give them insight into how retailers are managing inflation, which is still near 40-year highs.
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