Stock market today: live updates

It’s still early in the season for Q2 reporting, but so far the majority of both US and European companies are beating analysts’ estimates, but their stocks are underperforming, according to JPMorgan.

“Of the initial reports, with 70 S&P 500 results and 90 in Europe, the majority beat consensus forecasts,” Mislav Matejka, head of global and European equity strategy at JP Morgan, said in a note to clients early Monday. “The sample set is relatively small, but the stock price’s reaction to the beats is worse than usual.”

In addition, JPMorgan looked at companies issuing profit warnings ahead of Q2 earnings, and stocks within that group are down 10% or more, with the exception of some energy and chemical stocks, likely due to their poor performance in the first half of July.

The bottom line is that JPMorgan doesn’t expect Q2 results to give the market a big boost compared to Q1 for a number of reasons. “Stock price reactions in general could be more muted this time around, or at least positive momentum might have no legs,” Matejka wrote. “Going into the first quarter, sentiment and positioning were cautious, but the stock market was strong at the start of the second quarter reporting season, suggesting that buyer expectations are higher, even if analyst forecasts are subdued. It is also questionable whether expectations will be raised based on the quarterly numbers, as some momentum was lost as we progressed through the quarter, and the Chinese data stream continues to disappoint.”

Scott Schnipper, Michael Bloom

US stock futures opened little changed on Monday.

Futures linked to the Dow Jones Industrial Average lost just 5 points, or 0.01%. Meanwhile, S&P 500 futures and Nasdaq 100 futures rose 0.02% and 0.03%, respectively.

Hakyung Kim