US Stock Index Futures Mixed Ahead of Corporate Giants’ Earnings; Microsoft Reports After the Close

The major U.S. stock indexes are trading mixed shortly before the cash market opening on Tuesday as investors prepare for the heart of the corporate earnings season, highlighted by the release of the corporate earnings of larger companies that are likely to impact the direction of the overall trade.

General Electric, Verizon and Johnson & Johnson are slated to report results before the bell, while tech giant Microsoft will announce its fiscal second-quarter earnings after the bell.

At 11:32 GMT, March E-mini S&P 500 Index futures are trading 3846.00, down 2.50 or -0.06%. March E-mini Dow Jones Industrial Average futures are at 30893, up 25 or +0.08% and March E-mini NASDAQ-100 Index futures are trading 13444.25, down 31.25 or -0.23%.

Investors Could Be Set Up for Disappointment

BTIG chief equity and derivative strategist Julian Emanuel said on CNBC’s “Fast Money” that the market’s move higher over the past several weeks and high level of bullish options buying may make it hard for earnings reports to fuel another leg higher.

“This is the kind of setup that’s poised for disappointment,” Emanuel said, citing struggles for some other stocks despite earnings beats earlier in the season.

However, the strategist also said that the recent frothy trading may not have reached its peak and could push the broad market indexes even higher.

COVID Update

On the COVID-19 front, health officials and policymakers continued to caution the public about new strains of the virus. Moderna said Monday that its vaccine does provide some protection against a variant found in South Africa, while officials in Minnesota reported the first U.S. confirmed case of a strain found in Brazil.

Other News

Tuesday’s economic releases include data on consumer confidence and home prices.

Monday Recap

The major U.S. averages on Monday closed off their best levels of the day, although the S&P and NASDAQ still finished at record levels, as concerns over the timing and scope of fiscal stimulus dented optimism at the start of a week of earnings reports from mega-cap companies.

Politics at the Forefront

Investors turned their focus to the U.S. Senate, which is aiming to pass COVID-19 relief legislation before former President Donald Trump’s impeachment trial begins in early February. Stocks move lower after Democratic Majority Leader Chuck Schumer cautioned a stimulus bill may not pass for four to six weeks.

Officials in President Joe Biden’s administration are trying to head off Republican concerns that his $1.9 trillion pandemic relief proposal is too expensive.

‘Stay-at-Home’ Stocks Big Winners

After climbing as much as 1.4% to an intraday record, the NASDAQ Composite gave back a good portion of its gains, with the so-called “stay-at-home” winners, including Microsoft Corp, Facebook Inc and Apple Inc, rising after upbeat results from Netflix Inc last week.