US stock futures to open flat after posting gains last week

Some investors think that a lasting reversal may be difficult to achieve because of the still-high valuations and concerns about the companies' earnings outlooks.

Written by Sunil Dhawan

November 14, 2022 17:24 IST

Wall Street, US stocks, futures, S&P 500, Nasdaq 100, inflation data

Treasury rates increased and the Dollar gained ground against the majority of its key competitors.

US stocks ended the last week on a high note. The S&P 500 and Nasdaq 100 posted heavy gains on the back of easing inflation data. U.S. inflation figures announced on November 10 showed prices had risen less than expected in October. The inflation reading was welcomed by investors, who anticipated that the Federal Reserve would soon ease off on its aggressive tightening program. After US inflation was lower than expected in October, traders reduced their bets on the Fed raising interest rates quickly.

However, U.S. stock futures traded lower early Monday morning. This could be largely due to Federal Reserve Governor Christoper Waller disputing predictions that the US central bank was reaching the end of its rate-hike cycle. Subsequently, Treasury rates increased and the Dollar gained ground against the majority of its key competitors.

It is not right to conclude that the Fed has successfully reined in price increases after just one month of declining inflation. The Fed might start thinking about a downshift to a 50 basis-point move at its meeting in December or the meeting after that if the raising cycle continues for some time.

Also Read: Holding Big Five tech stocks? Here’s how Meta, Apple, Amazon, Microsoft and Alphabet are faring

Some investors think that a lasting reversal may be difficult to achieve because of the still-high valuations and concerns about the companies’ earnings outlooks.

Despite these recent advances, some investors are cautious to buy back shares of companies like Alphabet Inc., the parent company of Google, Microsoft Corp., and Amazon.com Inc., which have struggled this year after driving markets higher for more than a decade. While experts are downgrading their earnings projections for the sector, the valuation of stocks in the tech sector continues to be substantially higher than those of the entire market.

Meanwhile, US President Joe Biden and Chinese President Xi Jinping have begun direct talks outside of the G20 summit in Bali, Indonesia. Investors will carefully examine the wording and tone in search of positive cues. Investors are searching for a justification to return to China. The meeting between Biden and Xi is crucial.

Also Read: Biden-Xi meeting in Indonesia could be pivotal for investors

This article was first uploaded on November fourteen, twenty twenty-two, at twenty-four minutes past five in the evening.