US tech earnings in focus this weekJanuary 21 - 11am
US corporate earnings will take centre stage with Apple, Microsoft, IBM and Google among those scheduled to release in the coming days.
So far, about 72 percent of the 67 S&P 500 companies which have reported quarterly results beat analysts’ forecasts, according to Bloomberg News.
Results from General Electric and Morgan Stanley were among those that pleased investors on Friday, while shares of Intel copped a beating, reporting sagging sales after the market closed on Thursday.
After a weak start, Wall Street found momentum in the second half of last week that lifted it to five-year highs as the latest signs on earnings and the US economy proved positive, or at least better than expected, while House Republicans said they will agree to a temporary lift in the nation’s debt ceiling.
The vote on a three-month extension to the US$16.4 trillion borrowing limit-set to be surpassed sometime from mid-February to early March¸ according to the Treasury Department-will take place on Wednesday.
The debt-ceiling vote is part of a rethink by House Republicans to get Senate Democrats onside with a budget that details spending cuts.
“We are going to pursue strategies that will obligate the Senate to finally join the House in confronting the government’s spending problem,” Speaker John Boehner said in a statement late last week.
In the past week, the Dow Jones Industrial Average gained 1.2 percent, the Standard & Poor’s 500 Index rose 0.9 percent, while the Nasdaq Composite Index advanced 0.3 percent. Both Dow and S&P 500 finished the week at their highest level in five years.
And equities seem to be extending their appeal when compared against fixed-income securities.
“From a yield perspective, a lot of stocks still yield a great deal of money and so it is very easy to see why money is pouring into the stock market,” Stephen Massocca, managing director at Wedbush Morgan in San Francisco, told Reuters.
“You are just not going to see people put a lot of money to work in a 10-year Treasury that yields 1.8 percent.”
On Monday, US markets are closed for the Martin Luther King Jr holiday.
In Washington on Sunday, President Obama will take the oath of office to mark the official start of his second four-year term.
By Margreet Dietz - BusinessDesk