Dow Jones futures traded flat on Monday as investors brace for a painful earnings season. Analysts are widely predicting an “earnings recession,” a second-straight quarter of negative earnings growth.
Citi is first out of the gates on Monday, kicking off corporate earnings season before the bell. The Wall Street giant is expected to hold up on the back of a strong US economy. The real test, however, will come when tech companies report later in July.
Dow futures trade flat ahead of Citi earnings report
Dow Jones Industrial (DJIA) futures were relatively unchanged ahead of Monday’s opening bell. At 6.24 am, Dow futures traded at 27,346, just 37 points up.
Corporate earnings recession imminent?
US companies are increasingly sounding the alarm as earnings season approaches. More than three-quarters of companies that have issued guidance this quarter have lowered their estimates. The most in 13 years.
Traders now fear an earnings recession, a technical recession that occurs on back-to-back earnings drops. After the first quarter’s 0.3 percent drop, this quarter will be brutal; a predicted 2.8 percent fall across blue-chip stocks.
“If you’re worried about earnings, you should be taking some chips off the table… We’ve had a real nice rally this year. I wouldn’t be surprised if we had a pullback.” – Mitchell Goldberg, ClientFirst Strategy.
Dow Jones to feel the burn?
The hammer is expected to fall hardest on tech stocks. Specifically, tech hardware stocks. With the Dow comprised of Apple,