Dow futures slip after 9th record close of 2024

What’s driving markets

Friday also saw the release of payrolls data, which saw a surprisingly strong 353,000 jobs created in January. That U.S. stocks finished higher anyway, despite the bond-market weakness the jobs report triggered, shows the emphasis that the market has been putting on earnings, according to Mike Wilson, Morgan Stanley’s chief U.S. equity strategist.

“We see quality growth continuing to outperform amid strong earnings revisions, particularly relative to lower quality cyclicals and small-caps. For now, the internals of the stock market are suggestive of the idea that a stickier rate backdrop is a disproportionate headwind for stocks with poor balance sheets and a lack of pricing power — i.e., lower quality cyclicals and many areas of small-caps,” he said in a note.

See: Stock-market investors fear ‘no-landing’ economy could spell trouble. What’s next.

Federal Reserve Chair Jerome Powell used an appearance on “60 Minutes” to again push back on the idea the central bank would cut rates in March.

The Powell interview “didn’t help” overall market sentiment and neither did mixed readings on purchasing managers indexes for Europe, which show growth remains tepid, Bob Savage, head of markets strategy and insights at BNY Mellon, said in a note.

“Expect the focus on the day to be in part about 4Q earnings and whether the more main street companies are as upbeat as big tech,” Savage wrote.

Of S&P 500 companies, 46% have reported quarterly results this earnings season, according to FactSet. For the week ahead, the firm said, 104 S&P 500 companies will report results, including four from the Dow.

Earnings Watch: Fourth-quarter earnings are almost halfway done. Results overall have gotten better.

Results early Monday from Dow components Caterpillar Inc.
CAT,
+2.41%
and McDonald’s Corp.
MCD,
-0.35%
offered a mixed picture.

There’s more economic data in store, coming from the ISM services report. That report last month triggered worries about the economy after an unusually low reading for the employment component.

Companies in focus

• Caterpillar shares were poised to press further into record territory after the maker of construction and mining equipment reported fourth-quarter profit that rose well above forecasts, with particular strength in its energy and transportation business. Shares were up more than 4% in premarket trade.

• McDonald’s Corp.’s stock fell 1.3% in premarket trading on Monday after the fast-food giant missed Wall Street analysts’ estimates for revenue and same-store sales, while citing an impact from war in the Middle East.

• Shares of Tyson Foods Inc.
  TSN,
  -0.48%
  rose 5% early Monday, after the parent of food brands Tyson, Hillshire Farm, Jimmy Dean and Ball Park beat profit estimates for its fiscal first quarter, overshadowing a fifth straight sales miss.

• Shares of Estée Lauder Companies
  EL,
  -0.43%
  soared Monday, after the beauty-products company reported fiscal second-quarter profit that beat expectations by a wide margin, despite continued challenges in the Asia market.