Investing.com -- The new quarterly corporate season is scheduled to start this week, while eyes will also be on Boeing after the aircraft manufacturer suffered another equipment malfunction. Crude retreated on Middle East ceasefire hopes, while Bitcoin edged higher.
1. Quarterly earnings season set to start
The new quarterly earnings season kicks off this week, with the banking giants JPMorgan Chase (NYSE:JPM), Citigroup (NYSE:C) and Wells Fargo (NYSE:WFC) all reporting results on Friday.
Delta Air Lines (NYSE:DAL) and BlackRock (NYSE:BLK) are among other big names set to provide quarterly updates during the week.
The benchmark S&P 500 index is up more than 9% year-to-date, following its strongest first-quarter performance since 2019. But the bar may be rising for stocks to keep advancing at that pace, increasing pressure on companies to deliver strong results.
Mundane earnings growth could give investors less reason to hold onto stocks, at a time when elevated yields bolster the attractiveness of bonds.
Investors will also listen for companies’ views on the economy and inflation, to gauge whether the current environment of resilient growth and cooling consumer prices can continue.
2. Futures edge higher, consolidating ahead last week’s losses
U.S. stock futures edged slightly higher Monday, rebounding after a losing week although gains are likely to be limited ahead of the release of key inflation data and the new corporate earnings season.
By 04:05 ET (08:05 GMT), the Dow futures contract was 40 points, or 0.1%, higher, S&P 500 futures climbed 2 points, or 0.1%, and Nasdaq 100 futures rose by 20 points, or 0.1%.
The main Wall Street indices ended last week with solid gains, but still recorded sharp weekly losses amid uncertainty over when the Federal Reserve will start cutting interest rates.
The Dow Jones Industrial Average fell 2.3% last week, posting its worst weekly performance since March 2023. The S&P 500 index declined nearly 1% during the period, its biggest weekly loss since early January, while the tech-heavy Nasdaq Composite dipped 0.8%, suffering its fourth negative week in five.
Investors are eagerly awaiting the release of consumer price inflation figures for March on Wednesday, following Friday’s payrolls data that showed the U.S. economy added far more jobs than expected last month.
The combination of strong employment data and slow progress on inflation in the last couple of months has created doubt that the Fed’s first interest rate cut will arrive in June.
3. Engine cover falls off Boeing aircraft
Boeing’s pile of troubles received another addition on Sunday after an engine cover on a Southwest Airlines (NYSE:LUV) aircraft – a Boeing 737-800 – fell off during takeoff in Denver and struck the wing flap.
This resulted in the Federal Aviation Administration opening an investigation.
Southwest said the flight returned to Denver International Airport and landed safely after experiencing a mechanical issue.
Boeing (NYSE:BA) CEO Dave Calhoun announced last month he would leave by the end of the year, with the aircraft manufacturer under intense criticism since a door plug panel tore off a new Alaska Airlines 737 MAX 9 jet at 16,000 feet.
In the aftermath of the incident, the FAA grounded the MAX 9 for several weeks, barred Boeing from increasing the MAX production rate and ordered it to develop a comprehensive plan to address "systemic quality-control issues" within 90 days.
The Justice Department has also opened a criminal investigation into the MAX 9 incident.
Moody's (NYSE:MCO) Investors Service placed Boeing’s ratings on review for a downgrade late last month, with the company’s stock having fallen almost 30% year to date.
4. Bitcoin to benefit from crypto market expansion
Bitcoin edged higher Monday, and while further immediate strength now appeared uncertain, future gains are set to be impressive, according to Ripple CEO Brad Garlinghouse.
At 04:10 ET, the world’s largest cryptocurrency traded 2.4% higher at $71,040, after recouping a bulk of its weekly losses over the weekend.
Bitcoin, as well as the broader crypto market, benefits from a low-rate, high-liquidity environment, and Friday’s red-hot U.S. payrolls report created uncertainty over the likelihood of a Fed rate cut in June.
The digital currency still remained well within a trading range established over the past month, as it struggled for direction after hitting record highs in March.
Still, the combined market capitalization of the cryptocurrency market is likely to double this year, said Garlinghouse, in an interview with CNBC.
The CEO of the blockchain startup cited macro factors including the arrival of U.S. Bitcoin exchange-traded funds, as well as the upcoming so-called bitcoin “halving.”
The first spot Bitcoin ETFs were approved in January by the U.S. Securities and Exchange Commission, while the Bitcoin halving is set to happen later this month, and sees the total mining reward to bitcoin miners halving. The last such event took place in 2020.
“The overall market cap of the crypto industry ... is easily predicted to double by the end of this year ... [as it’s] impacted by all of these macro factors,” Garlinghouse said.
5. Crude falls on Israel-Hamas ceasefire hopes
Oil prices fell sharply Monday on raised confidence of a possible ceasefire in the Israel-Hamas conflict, easing concerns of supply disruption from the oil-rich Middle East.
By 04:10 ET, the U.S. crude futures traded 1.1% lower at $85.95 a barrel, while the Brent contract dropped 1.1% to $90.15 per barrel.
Teams from Israel and Hamas met in Egypt for renewed ceasefire talks, just days before the Eid holidays this week, while Israel pulled out some troops from southern Gaza.
The moves have resulted in a lessening of tensions in the region, and follow the U.S. urging Israel to tone down its offensive against Gaza over human rights violations.
Oil prices had surged to five-month highs last week after Iran threatened military action against Israel over alleged strikes on an embassy in Syria.
Expectations of tighter oil supplies have also boosted crude prices in recent weeks, and continued to remain in play.
The Organization of Petroleum Exporting Countries and allies recently reiterated that its production cuts will remain in place until end-June, while top producer Russia also flagged deeper production cuts.