Nasdaq Composite gained 0.3%. The small-cap
Under the surface, the S&P 500 energy sector closed up 3.6%, financials gained 1.1%, and consumer discretionary stocks added 1.5%. Defensive utilities and health care fell 0.6% and 1.1%, respectively, while technology stocks lost 0.5%. That dynamic has more or less prevailed since the fall.
Fourth-quarter earnings season begins later this week, with several large banks kicking things off as usual. Wall Street expects S&P 500 earnings to be 12% lower in the final three months of 2020 versus the same period in 2019, according to data from Bloomberg. Sales are expected to decline 6%.
The scrutiny will be much higher for defensive and relatively pandemic-proof sectors like consumer staples or technology. Those companies’ fundamentals have held up or improved during the pandemic, and investors will want to see that continuing in the fourth quarter. For the cyclical and economically sensitive companies that have led the market since
Here’s what we’re watching as markets kick into gear on Tuesday.
U.S. stock futures edged higher Tuesday, suggesting major indexes will resume their recent climb after a slide in technology shares weighed on markets at the start of the week. Read our full market wrap here.
What’s Coming Up Home builder KB Home will deliver its quarterly earnings report after markets close. Live Q&A: Join WSJ chief economics correspondent Nick Timiraos for an interview with the St. Louis Fed’s James Bullard. Bullard at 1 p.m. ET. The U.S. job openings and labor turnover survey for November is out at 10 a.m.
Stoxx Europe 600 was down 0.7%, after gaining 3% last week.
There were a number of factors contributing to the negative tone. The yield on the benchmark 10-year Treasury has backed up, with Federal Reserve officials beginning to speculate about tapering the rate of bond purchases in anticipation that fiscal stimulus will bolster the U.S. economy.
Federal Reserve Vice Chair Richard Clarida on Friday said he expected the central bank to keep bond purchases steady through the year. “Rising U.S. bond yields are again being named as the chief culprit [for declining risk appetite], plus a possibly overstretched risk rally,” said Alvin Tan, Asian currency strategist at RBC Capital Markets.
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Here’s what we’re watching ahead of the opening bell on Monday.
Futures tied to the S&P 500 slipped 0.9%, indicating the benchmark may fall from the all-time high it closed at on Friday. Contracts tied to the Nasdaq-100 edged 0.9% lower and those linked to the Dow Jones Industrial Average fell 0.9%.
Political rancor remains front and center, as the House may move to impeach President Trump as soon as this week.
What’s Coming Up Atlanta Fed President Raphael Bostic speaks on the economic outlook at 12 p.m., and Dallas Fed President Robert Kaplan speaks at a virtual town hall at 6 p.m.