Stocks on Wall Street are rising as traders wait for further earnings from the technology

Stocks on Wall Street are rising as traders wait for further earnings from the technology

Shares of Wall Street rose on Monday ahead of an important week of earnings reports by tech titans Alphabet, Amazon and Facebook owner Meta.

The broad-based S&P 500 index added 1.4 percent in afternoon trading, and its information technology sub-index rose 1.8 percent. The tech-heavy Nasdaq Composite Index strengthened 2.6 percent.

Investors have had to cope with increasingly volatile conditions since the beginning of the year, balancing between the likelihood of tighter monetary conditions with a solid baseline outlook for growth and mixed results in the fourth quarter.

According to a Goldman Sachs survey, of the 44 companies that have so far provided formal guidance on year-round earnings per share, 23 have advised above consensus and 21 have led below.

Apple i Microsoft, the two most valuable companies in the world by market capitalization, both posted optimistic results last week, helping Nasdaq achieve small weekly growth for the first time this year. Fellow tech heavyweights Alphabet, Meta and Amazon will unveil their latest quarterly figures on Tuesday, Wednesday and Thursday.

The Nasdaq, however, has fallen by about 10 percent this year as higher rate expectations reduce the value investors put on the future earnings of high-growth companies. The S&P 500 – which reached a record high only in early January – fell 6 percent over the same period.

The decline came as US Federal Reserve officials signaled that interest rates may need to rise faster and more aggressively to cope with inflationary pressures in the world’s largest economy.

Raphael Bostic, president of the Fed’s Atlanta branch, has stuck to his call to raise interest rates by three-quarters of a point in 2022. in an interview with the Financial Times over the weekend. But he said a more aggressive approach could include raising the rate of federal funds by half a percentage point – twice the usual amount.

However, Randeep Somel, fund manager at M&G Investments, said the Fed remained “very aware that it is making a policy mistake and must return and cut rates if the market slows down”.

The January decline, he added, represents an adjustment, not the beginning of a real bear market and “the market will calm down”.

In government debt markets, the yield on two-year U.S. Treasury bills, which closely follows policy expectations, remained at 1.16 percent after rising earlier in the session. Bond yields are the opposite of their price.

Meanwhile, the German 10-year Bund’s yield rose above zero ahead of a meeting on the European Central Bank’s policy on Thursday, and traders bet the ECB will join a global move towards tighter monetary policy by raising interest rates before the end of the year.

Markets are now priced in two increments of 0.1 percentage point by December, and some analysts predict that the ECB could even opt for a larger increase of a quarter of a point at the end of 2022 in an attempt to reduce high inflation.

Investors are also considering how to react if the conflict in Ukraine breaks out. Oil prices could rise above $ 100 a barrel if Russian President Vladimir Putin cut off natural gas supplies to Europe, according to Anatole Kaletsky of Gavekal Research.

“This would result in a global inflation crisis comparable to that following the 1973-74 Arab oil embargo,” Kaletsky wrote in a note Monday. “There is likely to be a drastic tightening of monetary policy and a deep bear market in both bonds and stocks.”

Brent, the international benchmark for crude oil, rose 1.4 percent on Monday to $ 91.25 a barrel.

As for European stocks, the Stoxx 600 index closed 0.7 percent higher after losing 1 percent in the previous session. The London FTSE 100 was equal. In Asia, Hong Kong’s Hang Seng and Tokyo’s Nikkei 225 advanced 1.1 percent.

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