NASDAQ Composite Jumps 1.45% Ahead of Key Earnings Data from Alphabet, Microsoft After the Bell

U.S. stock market futures are pointing lower on the opening after trading in Asia and Europe finished mixed. Traders had hoped for a much stronger opening call on speculation that the Federal Reserve could slow down its rate increases, but that outlook has been dampened by a more cautious tone ahead of major earnings reports this week.

The Major Pre-Market Movers

Despite a weaker call for the broad-based averages, several major companies are expected to open higher on the back of strong earnings. These include Coca-Cola, General Motors, General Electric and UPS.

Coca-Cola shares are expected to open about 2.9% higher based on the pre-market trade after the beverage giant’s third-quarter earnings and sales beat Street forecasts. The company also raised its full-year outlook as demand remains steady even as it has raised prices to make up for higher expenses.

General Motors shares are called about 4.4% higher after the automaker reported a better-than-expected third quarter profit, helped by rebounding sales. GM also said supply chain constraints are easing, allowing it to increase inventories on dealer lots.

General Electric is expected to jump about 4.2% on the opening based on the early trade even though its earnings fell short of forecasts. The company cut its full-year outlook as it works its way through supply chain issues and higher costs. GE’s revenue was stronger-than-expected, as was free cash flow.

Delivery service UPS shares are up about 4.4% ahead of the cash market opening following a mixed quarterly report that saw earnings beat the consensus and revenue fall short. UPS was helped by expanded profit margins as it raised prices.

On the downside, the biggest losers ahead of the opening were JetBlue and Xerox.

Home Prices Cooled at Record Pace in August

Home prices cooled at the fastest rate on record in August as the housing market struggles under sharply higher interest rates.

“The forceful deceleration in U.S. housing prices that we noted a month ago continued in our reports for August 2022,” wrote Craig Lazzara, Managing Director at S&P DJI in a release.

“Price gain decelerated in every one of our 20 cities. These data show clearly that the growth rate of housing prices peaked in the spring of 2022 and has been declining ever since.

Short-Term Outlook

The NASDAQ is trading higher so that likely means investors are already placing bets on favorable earnings reports from big technology after the bell. These reports are expected to offer further clues into the health of the U.S. economy.

Alphabet and Microsoft are among the companies set to report earnings after the bell. Chipotle Mexican Grill is also on tap.

Not only are the earnings reports a major issue, but also whether the Fed will continue its torrid interest hiking pace or will it announce a plan to slow down its aggressive hikes.

The drop in Treasury yields could be telling us that the Fed may be willing to pause after next week’s meeting. This is helping to give the market a lift.