Even Bitcoin USD and other tokens were rising as investors’ appetite for risky assets returned. Bitcoin rallied 6% to over $22,000, hitting its highest level since the dramatic selloff in mid-June brought the largest crypto down from $30,000 to as low as $18,000.
Stocks popped on Friday, with all three major indexes gaining more than 1% as investors dialed back their expectations for a full-point rate increase by the Federal Reserve. That’s given investors the all clear to focus on corporate profits instead. And they will have to focus given that 244 S&P 500 companies will report earnings over the next two weeks.
Already, companies are beating expectations. With almost 10% of the S&P 500’s market capitalization having reported earnings, earnings have come in 3.7% above estimates. Still, one issue remains. While companies are beating expectations for the past quarter, the road ahead might be more difficult. With interest rates rising and calls for a recession growing louder, it seems likely that earnings estimates must decline. Profit expectations for the S&P 500 for 2022 have risen over the course of the year, but are now down 0.3% in the past month, according to FactSet.
“Second quarter reporting season should kick off a much-anticipated round of negative earnings revision,” wrote Dennis DeBusschere, founder of 22V Research.
Yet, earnings look good enough Monday morning to keep the rally going. Goldman Sachs (ticker: GS), for instance, has gained 3.7% after reporting better-than-expected earnings, while
Whether earnings can be good enough to keep the rally going remains to be seen.
The current rally, while still ongoing, moderated some after the open Monday. The indexes were below their highs as both short-term and long-dated Treasury yields rose. Markets have been increasingly confident that interest rates have topped out, providing relief for the potential damage to the economy, but if they push higher, that could put a pause on the stock market rally.
Here are some stocks on the move Monday:
Stocks sensitive to digital assets rallied, with shares in crypto exchange