Market the day before
American stock exchanges closed in positive territory. The S&P 500 rose 1.13% to 4369 points, the Nasdaq gained 0.98%, and the Dow Jones added 1.30%. All sectors of the S&P 500 closed in the green zone. Financial (+ 2.87%) and energy companies (+ 2.01%) traded better than the market. The smallest growth by the health sector (+ 0.36%) and utilities (+ 0.16%).
Company news
Prothena Corporation (PRTA: + 7.2%) stocks continued to rise amid a strong outlook for Alzheimer’s treatment.
Shares of the real estate sector company iStar Inc. (STAR: + 8.2%) rose after Fitch upgraded its credit rating to BB.
Shares of a major biotechnology company Biogen Inc. (BIIB: -3%), Falls amid an investigation into Alzheimer’s drug.
We expect
Over the past weekend, no significant events took place; the general market situation is neutral. This week, US companies begin posting financial results for the second quarter of 2021. The market expects the S&P 500 to grow more than 60% YoY on the back of a low base effect and a gradual recovery in the global economy. Investors will also focus on the profitability of companies, as this is an essential indicator in the face of rising prices for productive resources. The 66 S&P 500 issuers posted positive earnings per share forecasts, a record since 2006.
Several economists are concerned about a slowdown in economic growth in the second half of 2021 amid mixed data on the labor market, as well as due to the possible spread of the strain ‘delta “.
Asian stock exchanges demonstrated confident, positive dynamics at the last trading session. Hong Kong’s Hang Seng added 0.62%, China’s CSI 300 rose 1.25%, and Japan’s Nikkei 225 gained 2.25%. EuroStoxx 50 loses 0.17%.
Moderate appetite for risk.
The 10-year Treasury yield is at 1.35%. Brent futures price exceeds $ 75.5 per barrel.
Gold is trading at $ 1,810 per troy ounce.
We expect that the upcoming session of the S&P 500 will be in the range of 4330-4380 points.
Sentiment Index
The Freedom Finance Sentiment Index stands at 61 out of 100, reflecting continued gains since the close of the trading session last week.
Technical picture
Technically, the S&P 500 is still in a long-term uptrend. The day before, the broad market index made a spurt to a new all-time high. The level of 4400 points is still the primary target for the bulls. Although the MACD indicator supports buyers., we would like to draw your attention that a bearish divergence is forming on the weekly chart by the RSI indicator, so there is a risk of a correction.
Insight
The largest American bank J.P. Morgan (JPM), will release its quarterly report on July 13. According to consensus expectations, the organization’s total revenue will decrease by 11.5% y / y with EPS growth (GAAP) from $ 1.38 to $ 3.16.
The focus will be on comments on the forecasted trends in lending activity in the second half of the year, as demand for loans was not strong enough in the first half of the year. In addition, weak long-term treasury yields are a risk factor in the short term, while investment banking revenues, in particular M&A fees, may surprise investors.
Citigroup (C) will publish its quarterly report on July 14. The consensus forecast foresees a 12.9% y / y decline in total revenue with EPS (GAAP) rising from last year’s $ 0.50 to $ 1.96, which will be in line with a rebound in earnings to Q2 2019. The decline in revenue was due to the lower level of net interest margin (1.88% versus 2.17% a year earlier). In June, the bank presented a forecast for higher costs in the reporting quarter, which is associated with implementing several strategic initiatives that may pay off in the long term. Comments on the volume of the share buyback program will be of increased interest to investors, as there is still uncertainty on this issue. It will also focus on potential forecasts and comments regarding operating costs for the current year.
Snack and beverage giant PepsiCo (PEP) will report its second quarter on July 14. The company weathered the pandemic better than competitors focus
