Traders on the NYSE floor, October 12, 2023.
Source: NYSE
Stock futures were slightly higher early Friday as traders prepared for earnings from major banks.
S&P 500 futures rose 8 points, or 0.19%, while Dow Jones Industrial Average futures gained 0.21%. Nasdaq 100 futures rose 0.1%.
All three major indexes ended the trading day in the red, with the Dow losing more than 173 points. The S&P 500 fell 0.62%, while the tech-heavy Nasdaq Composite lost 0.63%.
Although the three major averages ended with losses on Thursday, they are all on track for weekly gains. The S&P 500 is up 0.9% for the week, while the Dow gained nearly 0.7%. The Nasdaq Composite is the outperformer of the three, rising 1% through Thursday’s close.
This is the third consecutive positive week for the Nasdaq and the second consecutive positive week for the S&P 500. The Dow is also expected to break a streak of three consecutive weekly declines.
Thursday’s losses came after the latest consumer price index report revealed that inflation is still stubbornly persisting, pushing bond yields higher. The consumer price index (CPI) rose 0.4% in September, up 3.7% year-on-year.
JPMorgan, Wells Fargo, Citigroup and BlackRock will report third-quarter results for major financial firms on Friday. Investors could not hide their concerns as higher capital requirements and a looming recession threaten to squeeze financial sector profits.
In addition to fears of disappointing earnings and another possible interest rate hike, investors have also turned their concerns to the ongoing war between Israel and Hamas, which could potentially threaten global oil supplies and prices. But Nancy Tengler, chief investment officer at Laffer Tengler Investments, believes investors may be losing sleep for no reason.
“We will have some companies that will disappoint, but I think for the most part the earnings will surprise investors positively,” she said in an interview with CNBC. “Investors are too pessimistic. We assume that companies will manage this quite well.”
Tengler added that she expects stocks to end the year with a rally, led by the technology and industrial sectors.
On Friday, traders will also keep an eye on preliminary consumer sentiment data for October.