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Netflix, Bank Of America Lead S&P 500 Stocks On Tap

Stock market futures for the S&P 500 index, Dow Jones and Nasdaq 100 rose sharply Sunday as President Donald Trump signaled that Saturday’s attacks on Syria were “mission accomplished.” Earnings season kicks into high gear this week, with Netflix (NFLX), Bank of America (BAC), Charles Schwab (SCHW) on tap Monday. Meanwhile, Merck (MRK), Bristol-Myers Squibb (BMY) will present lung cancer trial data on their competing immuno-oncology blockbusters.

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The S&P 500 index, Dow Jones industrial average and Nasdaq composite rallied strongly last week, though they retreated Friday. U.S.-listed China internet and school stocks were big losers while banks sold off despite seemingly good earnings from JPMorgan Chase (JPM), Wells Fargo (WFC) and Citigroup (C).

Given that the Nasdaq composite hit a record high a month ago with the Dow Jones and S&P 500 hitting near-term peaks, a large number of top-rated stocks have formed new flat bases. That includes Bank of America as well as Apple, Intel and other tech titans.

Netflix is the first FANG stock to report earnings. Bank of America will see if investors like its results better than that of rivals. Charles Schwab kicks off online brokerage earnings, with two rivals due later this week. Merck and Bristol-Myers data offer the latest measuring stick for Keytruda and Opdivo.

Stock Market Futures

S&P 500 futures were up 0.6% vs. fair value. Dow Jones futures leapt 0.6%. Nasdaq 100 futures climbed 0.7%. The U.S. led airstrikes vs. Syria on Saturday for its alleged use of chemical weapons. But President Trump declared “Mission Accomplished” on Twitter.

That suggests the president isn’t likely to continue attacks that could have raised risks of a broader conflict that could include Russia and Iran. Trump’s focus seems to have left Syria, sending out several tweets blasting “slippery” ex-FBI Director James Comey. Still, U.N. Ambassador Nikki Haley said the U.S. would impose fresh sanctions on Russia over its support for Syria.

Remember that extended trading in stock market futures and individual stocks sometimes translates into regular session trading, but often does not.

Netflix, Bank of America, Charles Schwab, Merck and Bristol-Myers Squibb are all S&P 500 stocks.

Netflix Earnings Stream In

Wall Street expects adjusted first-quarter earnings per share of 63 cents, up 57.5%, with revenue soaring 40% to $3.69 billion, according to Zacks Investment Research. Netflix has predicted it would add 6.35 million streaming video subscribers for a global total of 123.93 million. It sees 1.45 million new U.S. subscribers and 4.9 million new overseas subscribers.

Several analysts raised price targets last week, bullish on Netflix’s growth. Its stock surged 7.9% last week, rebounding off its 50-day line. Netflix has been consolidating for a few weeks but does not yet have a proper base and buy point.

Netflix is an IBD 50 stock and on IBD’s Leaderboard.

Bank of America Has A Buy Point

Bank of America is expected to report a 43% EPS gain to 59 cents with revenue up 3% to $22.91 billion. Goldman Sachs (GS) Tuesday, Morgan Stanley (MS) Wednesday.

Bank of America has formed a flat base with a 33.15 buy point, but shares are trading below their 50-day line. BofA hit resistance at that key level Friday, reversing lower to fall 2.8% at 29.80.

Charles Schwab

Charles Schwab’s EPS should jump 38% to 54 cents as revenue grows 14% to $2.37 billion.

Schwab broke out March 9, but fell back below the buy point on March 14. The stock fell enough to invalidate that entry and has not yet formed a new base.

Fellow online brokers Interactive Brokers (IBKR) and E-Trade Financial (ETFC) report Tuesday and Thursday, respectively. Analysts expect strong earnings from those two IBD 50 stocks.

E-Trade Financial is in a buy zone, while Interactive Brokers has just formed a flat base.

TD Ameritrade (AMTD) has a flat base as well. TD Ameritrade, which also is on the IBD 50, will report earnings on April 24.

Merck, Bristol-Myers Lung Cancer Data

Last week Merck and Bristol-Myers Squibb announced positive results for their respective immuno-oncology drugs, Keytruda and Opdivo, in treating non-small lung cancer. They will provide clinical data from those trials at the American Association for Cancer Research annual meeting on Monday. The AACR event runs from Saturday through Wednesday.

Merck’s Keytruda has had the upper hand on Bristol’s Opdivo in recent years.

Merck on Sunday announced positive Keytruda results from a Phase III trial in melanoma patients.

The Dow Jones drug giant will hold an investor webcast Monday evening starting at 7:45 p.m. ET.

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