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US Futures Rise With Big Tech Earnings in Focus: Markets Wrap

In Business
April 22, 2024

(Bloomberg) — US equity futures gained as investors’ focus shifted from Middle East tensions to a raft of company earnings scheduled for this week, including four of the “Magnificent Seven” cohort of tech megacaps that have dominated the past year’s bull market.

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S&P 500 futures advanced by about 0.5% after the US gauge recorded its worst week since March 2023. Nasdaq 100 contracts added 0.7%. Demand for havens eased as traders took comfort from the absence of further escalation from Iran following Israel’s retaliatory strike. A Bloomberg dollar index was steady while the yield on 10-year US Treasury yields rose three basis points. Oil and gold both fell.

Nvidia Corp. gained more than 2% in premarket trading after the artificial intelligence favorite shed nearly $212 billion of its market capitalization in Friday’s broad tech selloff. Software maker Salesforce Inc. rose 3% after Bloomberg reported that takeover talks with Informatica Inc. have cooled. Tesla Inc., set to report earnings on Tuesday, dropped more than 2% after announcing price cuts for its electric vehicles.

“We are seeing a relief rally underway this morning as geopolitical risks subside,” said Kyle Rodda, a senior market analyst at Capital.com in Melbourne. “The move basically squares the ledger now and allows the markets to go back to focus on macroeconomic and corporate fundamentals.”

The Stoxx Europe 600 index gained about 0.4%, recovering some of last week’s slide. Prosus NV shares jumped as much as 5% as Tencent Holdings Ltd., in which it is a major shareholder, rallied after nailing down an earlier-than-anticipated debut of one of the year’s most eagerly-awaited mobile games.

Among other individual movers, Galp Energia SGPS SA surged as much as 19% after the Portuguese oil company provided an update on a commercial oil find off the coast of Namibia. Sandoz Group AG climbed more than 4% to a record after the Swiss pharma company confirmed the European Commission’s approval of its Pyzchiva psoriasis drug.

Robust Earnings

Robust earnings from Corporate America will pull the S&P 500 Index out of its latest morass, despite rising concerns about a significant jump in bond yields, according to Bloomberg’s latest Markets Live Pulse survey.

Nearly two-thirds of 409 respondents said they expect earnings to give the US equity benchmark a boost. That’s the highest vote of confidence for corporate profits since the poll began asking the question in October 2022.

Profits for the seven biggest growth companies in the S&P 500 — Apple, Microsoft, Alphabet, Amazon.com Inc., Nvidia Corp., Meta and Tesla — are on course to surge 38% in the first quarter, according to Bloomberg Intelligence. When excluding them, the rest of the benchmark index’s profits are anticipated to shrink by 3.9%.

Traders are also recalibrating their positions after a solid run of US data forced the Fed to reset the clock on its first interest rate cut. Data prints later in the week are likely to help finesse policy bets, with both US growth and the Fed’s preferred measure of inflation due.

A hefty slate of Treasuries auctions will be a major test of whether yields have peaked for the year.

Higher-than-expected interest rates amid persistent inflation are perceived as the biggest threat to financial stability among market participants and observers, the Fed said in its semiannual Financial Stability Report published Friday.

Key events this week:

  • Eurozone consumer confidence, Monday

  • ECB President Christine Lagarde speaks, Monday

  • Eurozone S&P Global Manufacturing PMI, S&P Global Services PMI, Tuesday

  • UK S&P Global, CIPS Manufacturing PMI, Tuesday

  • Australia CPI, Wednesday

  • Indonesia rate decision, Wednesday

  • IBM, Boeing, Meta Platforms earnings, Wednesday

  • Malaysia CPI, Thursday

  • South Korea GDP, Thursday

  • Turkey rate decision, Thursday

  • US GDP, wholesale inventories, initial jobless claims, Thursday

  • Microsoft, Alphabet, Airbus, Caterpillar earnings, Thursday

  • Japan rate decision, Tokyo CPI, inflation and GDP forecasts, Friday

  • US personal income and spending, University of Michigan consumer sentiment, Friday

  • Exxon Mobil, Chevron earnings, Friday

Some of the main moves in markets:

Stocks

  • S&P 500 futures rose 0.5% as of 5:58 a.m. New York time

  • Nasdaq 100 futures rose 0.7%

  • Futures on the Dow Jones Industrial Average rose 0.4%

  • The Stoxx Europe 600 rose 0.5%

  • The MSCI World index rose 0.2%

Currencies

  • The Bloomberg Dollar Spot Index was little changed

  • The euro was little changed at $1.0651

  • The British pound fell 0.2% to $1.2345

  • The Japanese yen was little changed at 154.77 per dollar

Cryptocurrencies

  • Bitcoin rose 1.9% to $65,915.8

  • Ether rose 2% to $3,213.08

Bonds

  • The yield on 10-year Treasuries advanced three basis points to 4.65%

  • Germany’s 10-year yield advanced four basis points to 2.54%

  • Britain’s 10-year yield advanced two basis points to 4.25%

Commodities

  • West Texas Intermediate crude fell 0.4% to $82.83 a barrel

  • Spot gold fell 1.3% to $2,361.07 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Winnie Hsu, Divya Patil, Catherine Bosley and Michael Msika.

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