- Banking heavyweights to report this week
- Speeches from Fed members in focus after jobs report
- Suntory to buy Beam for 16bn dollars
Dow Jones: -0.01%
S&P 500: -0.02%
US markets opened more or less flat on Monday morning in New York with investors cautious ahead of a busy week for corporate earnings.
Market Analyst Craig Erlam from Alpari said that Friday's much worse-than-expected non-farm payrolls data for December "did little to dampen investor sentiment" with markets finishing broadly higher on Friday.
"It seems at the moment nothing will stop equities continuing their push higher, with good data being seen as a sign that the economy is improving and poor data that quantitative easing will continue. Maybe a disappointing earnings season will give investors the reality check they need," he said.
A number of US bellwethers will be in focus this week with JPMorgan Chase & Co, Wells Fargo, Bank of America, Goldman Sachs and Citigroup all expected to report their fourth-quarter earnings in the coming days. They are among the 29 constituents on the S&P 500
to release their results this week.
According to a survey of analysts by Bloomberg, earnings for companies on the S&P 500 are expected to have increased by an average 4.9% in the fourth quarter on 1.8% higher sales.
Acting as a backdrop, and on the subject of whether US stocks are currently overvalued, the latest edition of FT Money cites Ewen Cameron Watt, the head of the Blackrock research institute, to the effect that they are perhaps less so that it might appear.
That is because companies last year issued a lot of investment-grade and high-yield debt which was used to retire equity, thus compensating for the low growth rate in corporate earnings.
A speech by Dennis Lockhart, President of the Atlanta Fed, will be closely watched later today with Friday's poor jobs report sparking more uncertainty in regards to the monetary policy outlook.
Meanwhile, Charles Plosser from the Philadelphia Fed and Richard Fisher from the Dallas Fed will both speak tomorrow. They are both voting members of the Federal Open Market Committee so their comments are likely to carry more weight.
Beam surges on Suntory takeover
Beam, the maker of spirits such as Jim Beam and Maker's Mark, advanced after Japanese firm Suntory Holdings said it will buy the company in a $16bn deal. The deal is expected to make Suntory the third-largest manufacturer of distilled drinks in the world. Shares in the US-listed stock jumped by as much as a quarter in morning trade.
Social media group Twitter was also a high riser after Goldman Sachs lifted its price target for the stock from $46 to $65, citing the company's product innovation.
Lululemon Athletica slumped after the sportswear company lowered its profits and sales forecast for the fourth quarter.
Symantec retreated after Morgan Stanley recommended a 'sell' rating for the anti-virus software maker.
MGM Resorts International edged higher as Bank of America upgraded the gaming and hospitality company to 'buy' from 'neutral'.