The S&P 500 and Nasdaq Composite closed at 15-month highs on Monday, while Dow industrials notched a sixth straight session of advances, as stock investors shook off disappointing data on China\u2019s economy that had curtailed risk appetite earlier in the day.<\/p>\n
Meanwhile, investors geared up for a busy week of second-quarter corporate results.<\/p>\n
Last week, the Dow rose 2.3%, the S&P 500 gained 2.4%, and the technology-heavy Nasdaq Composite jumped 3.3%. Dow industrials and the Nasdaq each saw their biggest weekly percentage gains since March, while the S&P 500 booked its best week since mid-June, according to Dow Jones Market Data.<\/p>\n
Wall Street began on a somewhat tentative start to the week after disappointing news from China fostered a cautious tone across global markets.<\/p>\n
Data showed the world\u2019s second-largest economy grew by only 0.8% in the second quarter compared with the previous three months, slowing sharply from a 2.2% rise in the first quarter. Growth was 6.3% year-over-year, below forecasts.<\/p>\n
Read:<\/strong> Investors start to fret that China, Europe may drag U.S. economy down with them<\/p>\n As the session wore on, however, stock investors chose to focus on the brighter side of U.S. prospects, while holding out hope that China\u2019s softer data may translate into more stimulus from Beijing. On Friday, a senior official at China\u2019s central bank, Liu Guoqiang, said policy makers could use their tools, such as the reserve requirement ratio (RRR) and medium-term lending facility, as needed to weather challenges.<\/p>\n \u201cI would describe this market as having a very \u2018Goldilocks\u2019 domestic view on where things are going,\u201d said Michael Reynolds, vice president of investment strategy at Glenmede, which oversees $41.5 billion in assets from Philadelphia. \u201cInvestors are getting excited about whether we could get immaculate disinflation, or inflation coming back to the Fed\u2019s 2% target while avoiding a recession. Whether that happens is something else.\u201d<\/p>\n Even after China\u2019s disappointing data on Monday, \u201cthere\u2019s a pretty big focus on the domestic economy right now and investors are of the view that China\u2019s government is going to step in with stimulus to get the country\u2019s economy going,\u201d Reynolds said via phone.<\/p>\n A risk-off mood could be seen in industrial commodities sensitive to perceptions of Chinese demand, with oil futures Meanwhile, the U.S. second-quarter earnings season faces a somewhat quieter session on Monday after Friday\u2019s big bank kickoff. FB Financial The next few days are nonetheless stuffed with potential market catalysts, analysts said. More earnings reports will come at a brisk pace this week, with updates from the likes of Tesla Earnings Watch: <\/strong>The nation\u2019s biggest banks are gearing up for more consumer struggles ahead<\/p>\n Stocks had rallied last week after a sharper-than-expected slowdown in inflation reflected in June data on consumer and producer prices. The data reinforced expectations the Federal Reserve is near the end of its rate-hike cycle. But some market watchers argued the rally, which has pushed the S&P 500 higher by 17.8% this year, has gone too far too fast.<\/p>\n Need to Know:<\/strong> The \u2018S&P 500 is hot, the Nasdaq is even hotter,\u2019 says strategist. How traders are bracing for a pullback.<\/p>\n \u201cKey inflation categories like shelter and wages remain uncomfortably high, for example, so if we see only one (or two) additional rate hikes, prudent investors may want to cast a skeptical eye on overly exuberant rallies,\u201d said Saira Malik, chief investment officer at Nuveen in New York, in a note.<\/p>\n \u201cAdditionally, in our view, the higher-for-longer interest rate environment has likely set the stage for a mild recession sometime in 2024 (our base case). Looking at S&P 500 corporate earnings as a gauge, analyst estimates continue to be revised lower for both the second quarter of 2023 and the full year,\u201d Malik wrote.<\/p>\n On Monday, Treasury Secretary Janet Yellen sounded an optimistic note on the prospect of avoiding a recession, citing the strength of the U.S. labor market and \u201cencouraging\u201d inflation data. \u201cI don\u2019t expect a recession,\u201d Yellen said in a Bloomberg Television interview, speaking from India on the sidelines of a Group of 20 finance officials\u2019 meeting.<\/p>\n The New York Fed\u2019s Empire State business conditions index, a gauge of manufacturing activity in the state, fell 5.5 points in July to 1.1, the regional Fed bank said Monday.\u00a0Economists had expected a flat reading, according to a survey by The Wall Street Journal. Any reading above zero indicates improving conditions.<\/p>\n
\n CL.1,
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\n declining for a second straight session and copper
\n HG00,
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\n also ending lower.<\/p>\n
\n FBK,
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\n and Home Bancorp.
\n HBCP,
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\n are among those delivering their results after the market closes.<\/p>\n
\n TSLA,
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\n Morgan Stanley
\n MS,
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\n Goldman Sachs
\n GS,
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\n Netflix
\n NFLX,
\n
\n and Bank of America
\n BAC,
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\n On the economic calendar, Tuesday\u2019s U.S. retail sales will provide more color about the behavior of the vitally important consumer.<\/p>\nCompanies in focus<\/h2>\n