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U.S. stock futures little changed ahead of big earnings

U.S. stock futures little changed ahead of big earnings
From Reuters - July 17, 2017

(Reuters) - U.S. stock index futures were little changed on Monday as investors treaded water ahead of a busy earnings week from big U.S. companies.

Bank of America (BAC.N), Morgan Stanley (MS.N), Goldman Sachs (GS.N), Microsoft (MSFT.O), IBM (IBM.N) and Johnson and Johnson (JNJ.N) are scheduled to report results this week.

Netflix (NFLX.O), which is scheduled to report results after the market close on Monday, rose 0.9 percent in premarket trading.

Analysts estimate second-quarter earnings for the S&P 500 companies rose 8.1 percent from a year earlier. First-quarter earnings posted their best performance since 2011, according to Thomson Reuters data.

Earnings will be closely watched to see if high valuations are justified in the face of tepid inflation and a recent patch of mixed economic data.

The S&P 500 has been trading at about 18 times earnings estimates for the next 12 months, compared with the long-term average of 15 times.

The Dow and the S&P hit record highs on Friday after weak economic data dulled prospects of more interest rate hikes this year.

Last week, investor sentiment got a boost after Federal Reserve Chair Janet Yellen said future rate hikes could be gradual in the face of persistently low inflation. The Fed will meet next on July 25-26.

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