Investing.com – The new quarterly corporate season is expected to start this week, while eyes will also be on Boeing after the plane maker suffered another equipment malfunction. Crude oil retreated on the back of Middle East ceasefire hopes, while Bitcoin rose.
1. Quarterly earnings season is about to begin
The new quarterly earnings season kicks off this week, with banking giants JPMorgan Chase (NYSE:), Citigroup (NYSE:) e Wells Fargo (NYSE:) all results will be reported Friday.
Delta Air Lines (NYSE:) and BlackRock (NYSE:) are among the other big names that will provide quarterly updates throughout the week.
The benchmark is up more than 9% year to date, following its strongest first-quarter performance since 2019. But the bar could be raised for stocks to continue advancing at that pace, increasing pressure on companies to deliver solid results.
Mundane earnings growth could give investors fewer reasons to hold stocks at a time when high yields bolster the appeal of bonds.
Investors will also listen to companies’ views on the economy and inflation, to gauge whether the current environment of resilient growth and cooling consumer prices can continue.
2. Futures are higher, consolidating last week’s losses
U.S. stock futures rose slightly on Monday, rebounding after a losing week, although gains are likely to be capped ahead of the release of key inflation data and the new corporate earnings season.
At 04:05 ET (08:05 GMT), the contract was up 40 points, or 0.1%, up 2 points, or 0.1%, and up 20 points, or 0.1%.
Wall Street’s main indexes closed last week with solid gains but still posted steep weekly losses amid uncertainty over when the Federal Reserve will begin cutting interest rates.
It fell 2.3% last week, marking its worst weekly performance since March 2023. The index fell nearly 1% during the period, its biggest weekly loss since early January, while stocks at high-tech content fell by 0.8%, recording the fourth negative week out of five. .
Investors are eagerly awaiting the release of March data on Wednesday, following data on Friday that showed the U.S. economy created many more jobs than expected last month.
The combination of strong jobs data and slow progress on inflation over the past two months has created doubts about whether the Fed’s first interest rate cut will come in June.
3. The engine cover falls off the Boeing airplane
Boeing’s pile of problems was added Sunday after the engine cover of a Southwest Airlines (NYSE:) plane – a Boeing 737-800 – fell off during takeoff in Denver and hit the wing flap.
This led the Federal Aviation Administration to open an investigation.
Southwest said the flight returned to Denver International Airport and landed safely after experiencing a mechanical problem.
Boeing (NYSE:) CEO Dave Calhoun announced last month that he would be leaving by the end of the year, with the plane maker heavily criticized since a door panel tore a new 737 MAX 9 jet from the Alaska Airlines at 16,000 feet.
Following the accident, the FAA grounded the MAX 9 for several weeks, preventing Boeing from increasing the MAX’s production rate and ordering it to develop a comprehensive plan to address “systemic quality control issues” within 90 days .
The Department of Justice also opened a criminal investigation into the MAX 9 crash.
Moody’s (NYSE:) Investors Service placed Boeing’s rating on review for a downgrade late last month, with the company’s shares down nearly 30% year to date.
4. Bitcoin will benefit from the expansion of the cryptocurrency market
It moved higher on Monday, and while immediate further strength now appears uncertain, future gains are set to be impressive, according to CEO Brad Garlinghouse.
As of 4:10 a.m. ET, the world’s largest cryptocurrency was trading 2.4% higher at $71,040, having recouped much of its weekly losses over the weekend.
Bitcoin, as well as the broader cryptocurrency market, benefits from an environment of low rates and high liquidity, and Friday’s blistering U.S. payrolls report has created uncertainty about the likelihood of a Fed rate cut in June.
The digital currency remained well within a trading range established over the past month, however, as it struggled to find direction after hitting record highs in March.
However, the combined market capitalization of the cryptocurrency market will likely double this year, Garlinghouse said in an interview with CNBC.
The CEO of the blockchain startup cited macro factors, including the arrival of US Exchange Traded Funds in Bitcoin, as well as the upcoming so-called “halving” of Bitcoin.
The first spot Bitcoin ETFs were approved in January by the US Securities and Exchange Commission, while the Bitcoin halving will take place later this month and will see the total mining reward for bitcoin miners halved. The last such event took place in 2020.
“The overall market capitalization of the cryptocurrency sector is easily expected to double by the end of this year… [as it’s] influenced by all these macro factors,” Garlinghouse said.
5. The price of crude oil collapses on hopes of a ceasefire between Israel and Hamas
Oil prices fell sharply on Monday on growing confidence in a possible ceasefire in the Israel-Hamas conflict, easing concerns of a disruption to supplies from the oil-rich Middle East.
At 4:10 a.m. ET, futures were trading 1.1% lower at $85.95 a barrel, while the contract fell 1.1% to $90.15 a barrel.
Teams from Israel and Hamas met in Egypt to renew ceasefire talks, days before the Eid holidays this week, as Israel withdrew some troops from southern Gaza.
The measures have led to an easing of tensions in the region and follow the United States’ request to Israel to tone down its offensive against Gaza over human rights violations.
Oil prices rose to five-month highs last week after Iran threatened military action against Israel over alleged embassy attacks in Syria.
Expectations of a reduction in oil supply have also pushed crude prices higher in recent weeks and have continued to remain in play.
The Organization of the Petroleum Exporting Countries and its allies recently reiterated that its production cuts will remain in place until the end of June, while Russia, the top producer, has also signaled deeper production cuts.