Stock futures traded little changed Monday evening after a mixed session earlier in the day, with investors awaiting the next set of corporate earnings results.
Investors on Tuesday will receive quarterly reports from companies including Pfizer (PFE), Lyft (LYFT) and Virgin Galactic Holdings (SPCE). Overall, corporate results so far have handily exceeded estimates, with 85% of the S&P 500 companies that reported having topped expectations by more than 22.1% in aggregate, according to an analysis from Credit Suisse analyst Jonathan Golub.
These strong results, however, have been met with just a shrug by Wall Street, with many companies not seeing their stocks pop even after posting estimates-topping results. Many pundit chalked this up to the already-elevated expectations heading into earnings season, with investors primed to see a rebound in corporate profits during the post-pandemic economic recovery.
“The numbers were good but Wall Street response was neutral at best. When the best earnings growth since 2010 spawns a yawn it’s pretty clear that perfection is priced in,” Hilary Kramer, chief investment officer for Kramer Capital Research, wrote in an email Monday. “While there’s no seasonal sell signal flashing, there’s no immediate reason to buy either. This is a great opportunity to review your positions, make any adjustments and then retreat to the sidelines for the next few months.”
Stocks are also entering a seasonally more stagnant period for gains. And with earnings reports winding down, investors over the next couple months will be left to react to developments around monetary policy and possible tax changes rather than on specific company fundamentals, Joe Fahmy, managing director of Zor Capital, noted Monday.
“I’m still bullish longer term but just cautious over the short term,” Fahmy told Yahoo Finance. “I’m thinking one of two things happens from here: Either growth stocks stabilize and lift the markets higher, or the weakness beneath the surface brings the market lower. And I’m leaning toward the latter for several reasons, the main one is … what happened over the last couple of weeks. So many mega cap tech stocks reported remarkable earnings. But as I like to say it’s not the news, it’s the market’s reaction to the news. And they were sold off, which was telling me that the big institutions are selling into strength right now.”
Others also suggested markets might be set to churn in the near-term.
“I think what we’re looking for is potentially something more like March where we chopped around a bit and digested February’s moves. We’re going to chop around a bit and digest April’s moves,” Bill Baruch, Blue Line Futures president, told Yahoo Finance on Monday. “4,186 is a big level for me in the S&P 500, and it’s been rather sticky. Yes we’ve been above it, we’ve also been a little bit below it since achieving it, and I think it’s a very sticky level and we’re going to see it play back and forth.”
6:15 p.m. ET: ET Monday Stock futures trade flat
Here’s where markets were trading as the overnight session kicked off:
S&P 500 futures (ES=F): 4,184.00, down 1.75 points or 0.04%
Dow futures (YM=F): 34,009.00, up 1 point or unchanged
Nasdaq futures (NQ=F): 13,781.5, down 8.5 points or 0.06%
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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