US equity futures rose as traders saw positive signs in corporate earnings reports.
(Bloomberg) — US equity futures rose as traders saw positive signs in corporate earnings reports.
Contracts for the S&P 500 advanced after a two-day decline in the underlying guage, while those for the tech-heavy Nasdaq 100 extended Wednesday’s rally.
Earnings from Meta Platforms Inc. beat analyst estimates, pushing its shares 11% higher in after-hours trading. About three-quarters of US corporate earnings so far have exceeded expectations. Amazon.com Inc., Caterpillar Inc., Merck & Co. and Intel Corp. are among the next to report.
Treasuries and the dollar were steady before US GDP and jobless claims to gauge the strength of the US economy. The Federal Reserve’s preferred inflation gauge, the core PCE deflator, is due Friday.
Yields on five-year notes dropped the most in a month on Tuesday, spurred by a wave of quant investors.
Read more: Quant Funds Show Up in Treasury Rally, With More Buying in Store
The potential for a tightening of credit conditions linked to the banking turmoil may prompt the Fed to adjust the pace of its interest-rate increases, Evercore ISI’s head of central bank strategy Krishna Guha wrote in a note, citing issues at First Republic Bank. The US regional lender faces potential curbs on borrowing from the Fed.
“We cannot rule out the possibility developments around First Republic could unfold in a manner that would lead the FOMC to skip May, while signaling a hike in June,” Guha said.
In earnings, Sanofi’s profit topped stimates as the French drugmaker’s blockbuster therapy Dupixent gained market share. AstraZeneca’s profit also rose in the first quarter, helped by sales of its blockbuster oncology treatments. Deutsche Bank AG dropped after trading revenue disappointed. Nomura Holdings Inc. shares fell after reporting a slump in profits.
Pharmaceuticals are well-positioned to weather recession, according to Janet Mui, the head of market analysis at RBC Brewin Dolphin, who recommends shifting to defensives.
“There has been some weakening in credit data which suggests it’s getting more difficult to get a loan,” Mui told Bloomberg TV. “This raises a chance of recession by the end of the year.”
The Stoxx 600 Index turned higher after erasing an earlier loss, paced by gains in drugmakers and banks following upbeat results from Sanofi, AstraZeneca Plc and Barclays Plc.
Meanwhile, oil fluctuated after a Wednesday fall, gold traded near the highest level in a week and Bitcoin resumed an advance.
Here are some of the main moves in markets:
Stocks
- S&P 500 futures rose 0.5% as of 6:59 a.m. New York time
- Nasdaq 100 futures rose 0.8%
- Futures on the Dow Jones Industrial Average rose 0.5%
- The Stoxx Europe 600 rose 0.1%
- The MSCI World index was little changed
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at $1.1046
- The British pound was little changed at $1.2468
- The Japanese yen was little changed at 133.58 per dollar
Cryptocurrencies
- Bitcoin rose 2% to $28,989.32
- Ether rose 0.9% to $1,884.28
Bonds
- The yield on 10-year Treasuries was little changed at 3.46%
- Germany’s 10-year yield was little changed at 2.40%
- Britain’s 10-year yield was little changed at 3.73%
Commodities
- West Texas Intermediate crude was little changed
- Gold futures rose 0.7% to $2,010.30 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Anchalee Worrachate and Edward Bolingbroke.
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