Nasdaq 100, Dow Jones, S&P 500 News: Wall Street Eyes Tech Amid GM and Coca-Cola Earnings Uncertainty

Highlights

• Nasdaq gains hint at tech resilience.
• GM labor issues cloud Q3 outlook.
• Coca-Cola’s future guidance pivotal.

Stock Market Prepares for Big Tech Earnings Amid Mixed Sentiment

As Wall Street grapples with inflation, rising interest rates, and the potential for an economic downturn, investors are eyeing this week’s tech-heavy earnings reports. While the Dow Jones and S&P 500 experienced modest declines, the Nasdaq managed to gain ground, suggesting tech could be the sector to watch. Notably, the U.S. 10-year Treasury yield crossed the 5% mark last week for the first time since 2007, casting a pall over the broader market.

General Motors: Labor Unrest and EV Delays

Investors are on high alert for General Motors’ Q3 earnings report, especially amid ongoing labor issues and an adjusted business strategy in the electric vehicle (EV) market. The United Auto Workers (UAW) strikes at GM facilities could potentially result in a $200 million hit to the company’s Q3 profits, according to JPMorgan. Furthermore, GM’s decision to delay its EV truck plant conversion until late 2025 raises questions about the company’s $35 billion commitment towards electrification and the timeline for going all-electric by 2035.

Coca-Cola: Guidance in Focus

Coca-Cola’s performance will also be scrutinized when it releases its earnings report. The primary concern among investors is not just whether the beverage giant will beat its EPS estimate of $0.69 but also what guidance it will offer for future quarters. In a market where share prices often move on the quality of projections rather than immediate earnings performance, Coca-Cola’s forward-looking statements will be pivotal.

Cross-Industry Supply and Demand

About 30% of S&P 500 companies are set to report this week, and three-quarters have already surpassed expectations, per FactSet. Yet, with economic data concerning the services and manufacturing sectors due, investors are not only focused on individual stocks but also on the broader supply and demand dynamics that could influence market sentiment.

Early Forecast: Neutral

Given the Nasdaq’s recent gains, there’s a hint of bullishness in the tech sector. However, labor disruptions at GM and unclear forward guidance from Coca-Cola skew the short-term market outlook towards the bearish side.

Heightened by increasing Treasury yields and potential economic headwinds, investors are likely to adopt a more conservative stance in the near term. The upcoming earnings announcements and shifts in Treasury yields will be crucial in shaping market sentiment.

Technical Analysis

 

The current daily price of the Dow Jones Industrial Average stands at 32936.42, which is below both the 200-day moving average of 33829.68 and the 50-day moving average of 34134.76. This suggests a bearish trend and could indicate a more extensive downside unless there’s a decisive break above these key moving averages.

The market sentiment appears to be bearish, as the asset’s price is trading below both significant moving averages, implying a lack of buying interest and weakening momentum.