U.S. stocks soared to new record highs on Monday, with the S&P 500 and Dow Jones Industrial Average closing at all-time highs as investors braced for a busy week of earnings reports. The S&P 500 achieved its 46th record close of the year, while the Dow crossed the 43,000 mark for the first time.
More than 80 companies from the S&P 500, including heavyweights like Netflix, Goldman Sachs, and Morgan Stanley, are set to release their third-quarter earnings reports this week. According to Fundstrat, 6% of S&P 500 companies have already reported, with 74% surpassing profit estimates by a median of 6%, and 58% exceeding revenue expectations by a median of 2%.
While the economic calendar is relatively quiet this week, all eyes are on Thursday, when September retail sales and initial jobless claims are set to be released. These reports will provide valuable insights into the health of both the consumer sector and the job market.
In terms of Federal Reserve news, Fed Governor Christopher Waller advised caution regarding future interest rate cuts. Speaking on Monday at Stanford University’s Hoover Institution, Waller emphasized the need for a more careful approach to monetary policy.
“I view the totality of the data as saying monetary policy should proceed with more caution on the pace of rate cuts than was needed at the September meeting,” Waller stated. He added that he would be closely monitoring upcoming data on inflation, the labor market, and overall economic activity to determine if a more cautious approach to rate cuts is warranted.
The CME FedWatch Tool indicates that markets are currently pricing in a 25-basis point rate cut at both of the Federal Reserve’s remaining meetings this year, in November and December.
As earnings season heats up and investors digest key economic data, the markets continue to rally, setting the stage for what could be an eventful week ahead.
