The slump in stock markets; Wall Street anticipation

Stock markets declined on Monday as traders anticipated multiple corporate earnings from big tech companies and fresh economic data releases.

Futures on Dow Jones Industrial Average declined by 89 points or 0.3%. Nasdaq-100 and S&P 500 futures declined by 0.4% and 0.3%, respectively.

The major indexes declined last week at the start of the earnings season, with several major banks releasing quarterly results for the first time since the banks collapsed in March. The Dow fell by 0.23% to end a four-week winning streak. The Nasdaq fell by 0.42% while the S&P by 0.1%.

According to FactSet, about 76% of S&P 500 companies that announced earnings on Friday beat analyst estimates. However, the first quarter earnings for S&P 500 companies should decline by 5.2% overall per Refinitiv basis.

Wall Street is looking forward to this week’s mega-cap tech results, which will mark the middle of earnings season. Microsoft, Alphabet, Meta, and Amazon are among the high-interest names to announce their first-quarter result.

Experts weigh in

Aswath Damodaran, a finance professor from the Stern School of Business at New York University, informed CNBC’s Closing Bell on Friday that numerous companies have utilized 2022 as a chance to include all of their negative results in their earnings reports.

Damodaran stated that it would not be a surprise if the financial statements displayed a great variety of impressive outcomes.

Investors are also closely monitoring new economic data, indicating whether inflation is easing or the Federal Reserve will announce another interest rate hike at its next meeting in early May. Additionally, the first-quarter GDP and April Consumer Confidence figures will become public alongside other economic metrics.

“One of the reasons we are so focused on economic data is that we believe the investors’ narrative is still centered on the Fed and interest rates. We believe economic reports over the next seven to 10 days will be a very important factor in the Fed’s ultimate intentions,” according to Greg Bassuk, CEO of AXS Investments.

European stock market

European stocks were lower on the open before recovering, with the Stoxx 600 index declining by 0.05% as of 9:12 am London time.

Sectors have been shuffled, oil and gas supplies have been reduced by 0.6%, and financial services by 0.6%.