Stocks and index ETFs are climbing Monday, led by a bounce on the Nasdaq Composite following dismal performance last week, as investors watched gold rocket to new highs and prepare for a significant week of corporate earnings.
The Dow Jones Industrial Average added as much as 0.4% before paring some of those gains. The S&P 500 climbed 0.5% higher before recoiling, and the Nasdaq Composite jumped 1.2% before paring gains as well.
Stock index ETFs are trading higher along with their underlying benchmarks. The SPDR Dow Jones Industrial Average ETF (DIA), SPDR S&P 500 ETF Trust (SPY), are slightly positive in early afternoon trade Monday, while the Invesco QQQ Trust (QQQ) has attempted to recover some of its heavy losses from last week, up 0.87% as of 1215pm EST.
The move higher in stocks arrives amid a record explosion in gold futures and ETFs. Gold surged higher in overnight futures trading Sunday, reaching as much as $1,943.93 an ounce, and breaking the 2011 previous record high, before falling back some to trade near $1932. The SPDR Gold Trust(GLD) is 1.90% higher amid the pop.
Stocks are struggling to break higher with the FOMC meeting coming later this week and a lackluster number for core durable goods orders hampering market sentiment Monday. Non-defense orders excluding aircraft rose 3.3% on a month-over-month basis in June, missing the 3.6% gain projected by economists polled by Dow Jones.
Investors are also awaiting a significant corporate earning week, filled with releases from McDonald’s, Pfizer, Alphabet, Apple, and AMD.
Through Friday’s close, 128 S&P 500 companies had reported earnings, with 81% beating analyst expectations, according to Refinitiv. Still, overall S&P 500 earnings have dropped more than 40% from the year-earlier period as a result of the coronavirus pandemic eating away at profits. This has not stopped stocks from strongly rebounding since March, however.
“Stock prices have soared even as analysts’ consensus expected earnings estimates have plunged,” said Ed Yardeni, chief investment strategist at Yardeni Research. “These estimates have started to show signs of bottoming in the past few weeks. However, any recovery could be dampened or even aborted if the Covid-19 case count continues to mount and state governors slow or reverse the lifting of lockdown restrictions.”
For more market trends, visit ETF Trends.