With the Fed meeting behind it, the stock market will focus again Thursday on the gusher of earnings news that has been driving the stock market to record highs.
At least 60 S&P 500 companies report, making it the busiest day of the earnings season. Procter and Gamble, Bristol-Myers Squibb, Verizon,Comcast, MasterCard, UPS, Celgene, A-B InBev, ConocoPhillips, Raytheon and Twitter report before the opening bell. Amazon, Baidu and Starbucks report after the bell.
Facebook was up 4 percent after its late earnings Wednesday, and that could help propel Nasdaq Thursday.
“Everything seems to be clicking on all cylinders in general for earnings. Boeing was certainly the leader of the day in the Dow,” said Art Hogan, chief market strategist at Wunderlich Securities. “I think it’s been an earnings season that certainly has outperformed estimates across the board, and there’s been more good news than bad.”
Hogan said it’s also the first quarter in a while where companies weren’t actively lowering the bar, giving themselves an easier target to beat.
Earnings for the S&P 500 companies that have reported so far are growing at a pace of more than 10 percent. About 78 percent of the companies have beaten earnings estimates, and 73 percent have done better than revenue estimates.
Besides earnings, there are also some key economic reports Thursday, including durable goods, advanced economic indicators and weekly jobless claims, all at 8:30 a.m. ET. Housing vacancies are reported at 10 a.m.
The Fed Wednesday said it would soon move on its plan to unwind its balance sheet, as it left interest rates unchanged. The Fed did slightly tweak its comment on inflation, but provided no surprise for markets.
“The cooling we’ve seen in inflation has not affected the trajectory of the balance-sheet adjustment,” said David Lebovitz, global market strategist at JP Morgan Asset Management. The Fed is expected to announce the beginning of its balance-sheet reduction at its September meeting.
“In our view, it means the balance-sheet normalization commences in October,” Lebovitz said. “In terms of general impressions, it sounds like the Fed is looking to hike rates for a third time this year.” Lebovitz said the Fed will be looking for a firming in inflation data.
Treasury yields were slightly lower after the Fed meeting, as bond traders took the Fed’s continued focus on inflation as dovish. Inflation data has been disappointingly weak for four months now.
Stocks ended the Wednesday higher, with major indices at fresh all-time highs. The Dow closed at a record 21,711, up 97 points. The S&P 500 was up just under 1 point at 2,477, and the Nasdaq was at 6,422, up 10 points.
Markets are also monitoring the efforts by Congress to approve a health-care bill.
“We’re not going to get anything new out of Washington. The market is largely ignoring it all. They voted on two things and missed on them both,” said Hogan. “They need to shelve this and pivot to tax reform. That’s all the market cares about.”