S&P 500; US Indexes Fundamental Daily Forecast – S&P 500 Profits May Have Jumped 11.2 Percent Last Quarter

The major U.S. cash indexes were closed on Monday due to the Martin Luther King, Jr. holiday. It was also a bank holiday. The electronic futures market was open, but closed early.

The markets are going to open Tuesday’s session were they left off on Friday. In the cash market, the benchmark S&P 500 Index settled at 2786.24, up 18.68 or +0.67%. The blue chip Dow Jones Industrial Average closed at 25803.19, up 228.46 or +0.89% and the technology-based NASDAQ Composite Index finished the session for 7256.16, up 44.38 or +0.61%.

Last week, the S&P 500 Index closed up 1.6%. The Dow Jones Industrial Average finished 1.69% higher and the NASDAQ Composite Index gained 1.7%.

Stocks were up over 1% for a second week in a row. Last year, they posted 1% weekly gains 10 times. Not since July 2016 had the indexes closed over 1% for two consecutive weeks.

In limited trading on Monday, March E-mini S&P 500 Index futures closed at 2794.50, up 5.75 or +0.21%. The March E-mini Dow Jones Industrial Average futures contract settled at 25937, up 136 or +0.53% and the March E-mini NASDAQ-100 Index finished at 6780.25, up 5.00 or +0.07%.

Major economic reports are limited this week so the focus for traders will be earnings. S&P 500 profits are expected to have risen 11.2 percent in the fourth quarter of last year. All 11 S&P 500 sectors, meanwhile, are expected to post increases in both earnings and revenue, according to FactSet. This would be the first time since 2011 that all sectors in the S&P 500 posted sales and profit growth in the same quarter.

Investors will also be tuned into any commentary about the impact of the tax reform plan on future earnings.

Recent economic data suggests the U.S. economy is picking up steam. The most important factor driving the price action this year has been growth. Although the huge rise in prices carries some risk, investors believe that the expected economic growth outweighs the risk factors.