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U.S. stocks may experience a mixed opening on Monday following six consecutive weeks of gains.
Earnings announcements are set to accelerate in the coming days, potentially mitigating any market downturns, with Tesla Inc. (TSLA -1.27%), Boeing Co. (BA +3.45%), General Motors Co. (GM -0.08%), and several others scheduled to release their results by Friday.
Ryan Detrick, Chief Market Strategist at Carson Group, recently pointed out encouraging trends for the S&P 500, noting that the index has climbed in 10 of the past 11 months.
Detrick underscored the importance of prolonged bull markets, stating, “Once a bull market surpasses its second anniversary, it often continues for many more years.” This observation indicates a strong outlook for investors as the current bull market progresses.
Approximately 20% of S&P 500 companies are expected to report their earnings this week. According to FactSet, cumulative earnings for S&P 500 companies are projected to increase for the fifth consecutive quarter. The analytics firm also noted that 79% of the 14% of S&P 500 companies that have reported so far have surpassed Wall Street expectations.
Detrick highlighted that the S&P 500 has achieved a six-week streak of gains for the first time this year. Citing data from 51 similar past occurrences, Detrick observed that stocks rose 86.3% of the time in such scenarios, with an average increase of 11.1%.
“Both are better than typical returns,” he remarked, bolstering his optimistic outlook.
Nathan Peterson, Director of Derivatives Analysis at the Schwab Center for Financial Research, mentioned that the focus will shift to earnings next week.
“Currently, I don’t see sufficient evidence to indicate a mean reversion pullback, so I believe the path of least resistance remains upward.”
He emphasized that his outlook on equities for this week is “slightly bullish.”
However, Peterson added that if earnings momentum reverses, investors might take profits.
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