US stocks reeling from the impact of high bond yields are facing a new threat from an expected slew of profit warnings, triggered by fading US consumer spending trends.
Concerned that Americans might be pulling back, 80% of 567 respondents in the Bloomberg Markets Live Pulse survey said that some sectors are likely to caution about earning trends when they report quarterly results. This will weaken the S&P 500 Index, which gained 1.2% Friday after a breakthrough in talks between unions and automakers lifted sentiment. US equity futures were sliding in early Monday trading in Asia after Hamas attacks within Israel.
“The consumer space will be tough going into this quarter,” said Stephanie Niven, a London-based portfolio manager at investment firm Ninety One. “We’re beginning to feel that there may be some challenges and that’s combined with the Fed hiking cycle beginning to filter through.”
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