From Jack Denton’s “Dow, S&P 500 Head for New Highs, Big Tech Earnings Loom” posted early Tuesday by Barron’s:
The stock market was rising Tuesday as investors continued to devour strong corporate earnings, which have been the latest catalyst pushing equity indexes to record highs.
Futures for the Dow Jones Industrial Average indicated an open 100 points higher, after the index closed at a record high of 35,741 points Monday. The S&P 500, which also ended Monday at a new high, was set for a similarly upbeat start, as was the Nasdaq.
Companies representing around 50% of the market capitalization of the S&P 500 index will have reported quarterly earnings by the end of the week. Despite widespread worries about supply-chain disruptions—which have pinched some companies—results have been strong, and earnings per share growth is on track to exceed Swiss bank UBS’ 30% estimate for the quarter.
“Even though this has been a good earnings season in aggregate we are starting to see more companies with supply backlogs, hiring difficulties, and rising input prices that are eating into profits,” said Jim Reid, a strategist at Deutsche Bank. “Indeed yesterday saw a few consumer staples companies lower full-year profit outlooks in their earnings releases.”
Patterns: Engulfing line (bearish). Max pain: $146 up from $145.