The S&P 500 futures trade 27 points, or 0.6%, above fair value as the market tries to recover from recent losses amid another round of mostly better-than-expected earnings reports. The Nasdaq 100 futures trade 0.2% above fair value after being up as much as 1.4% above fair value.
The Nasdaq futures have been pressured by an earnings miss from Alphabet ( GOOG 2286.80, -103.32, -4.3%), which has investors bracing for disappointing results from Meta Platforms ( FB 175.90, -5.05, -2.8%) after the close.
On the bright side, Microsoft ( MSFT 280.80, +10.58, +3.9%), Visa ( V 211.66, +10.56, +5.3%), and T-Mobile US ( TMUS 127.27, +2.31, +1.9%) are up nicely in pre-market action after topping EPS estimates.
While earnings reports, as a whole, have been decent, the market is still grappling with growth concerns attributed to the Fed’s tightening plans, China’s COVID lockdowns, Russia’s war in Ukraine, inflation, and supply chain disruptions. The downside volatility has kept investors on edge.
The Treasury market is relatively calm after two days of gains. The 2-yr yield is unchanged at 2.55%, and the 10-yr yield is unchanged at 2.77%. The U.S. Dollar Index is up 0.4% to 102.72. WTI crude futures are up 0.3% to $101.93/bbl.
On the data front, investors will receive Advance International Trade in Goods, Retail Inventories, and Wholesale Inventories for March at 8:30 a.m. ET, followed by Pending Home Sales for March (Briefing.com consensus -1.5%) at 10:00 a.m. ET. The weekly MBA Mortgage Applications Index fell 8.3% following a 5.0% decline in the prior week.
In U.S. Corporate news:
- Microsoft (MSFT 280.80, +10.58): +3.9% after beating EPS estimates on 18.4% revenue growth. MSFT issued in-line fiscal Q3 revenue guidance.
- Alphabet (GOOG 2286.80, -103.32): -4.3% after missing EPS estimates. The Board authorized the company to repurchase up to an additional $70.0 billion of its Class A and Class C shares.
- Visa (V 211.66, +10.56): +5.3% after beating top and bottom-line estimates.
- Boeing (BA 161.04, -6.00): -3.6% after missing top and bottom-line estimates.
- T-Mobile US (TMUS 127.27, +2.31): +1.9% after beating EPS estimates and raising its core adjusted EBITDA, postpaid net customer additions, net cash flow, merger synergies guidance.
Reviewing overnight developments:
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Equity indices in the Asia-Pacific region ended the midweek session on a mixed note. Japan’s Nikkei: -1.2% Hong Kong’s Hang Seng: +0.1% China’s Shanghai Composite: +2.5% India’s Sensex: -0.9% South Korea’s Kospi: -1.1% Australia’s ASX All Ordinaries: -0.8%.
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In economic data:
- China’s March Industrial Profit 8.5% YTD (last 5.0%) o South Korea’s April Consumer Confidence 103.8 (last 103.2)
- Australia’s Q1 CPI 2.1% qtr/qtr (expected 1.7%; last 1.3%); 5.1% yr/yr (expected 4.6%; last 3.5%)
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In news:
- Japan’s Prime Minister Kishida announced a JPY6.2 trln stimulus package while a JPY2.7 trln extra budget is expected to be compiled at a later time.
- There was some speculation that a plan to reopen Japan to tourists will be proposed.
- South Korea’s 12-month household inflation expectations increased to 3.1% from 2.9%.
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Major European indices trade in the green. STOXX Europe 600: +0.7% Germany’s DAX: +0.3% U.K.'s FTSE 100: +0.8% France’s CAC 40: +0.5% Italy’s FTSE MIB: +0.5% Spain’s IBEX 35: +0.4%.
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In economic data:
- Germany’s May GfK Consumer Climate -26.5 (expected -16.0; last -15.7)
- U.K.'s April CBI Distributive Trades Survey -35 (expected -3; last 9)
- France’s April Consumer Confidence 88 (expected 92; last 90)
- Italy’s March non-EU trade deficit EUR510 mln (last deficit of EUR1.55 bln)
- Swiss April ZEW Expectations -51.6 (last -27.8)
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In news:
- The supply of Russian gas to Poland and Bulgaria will reportedly remain halted until the two countries agree to pay for deliveries in rubles.
- Germany’s Finance Minister Lindner warned about a “very high risk” of a feedback loop between inflation and higher wages.
- Deutsche Bank reported better than expected profit for Q1 while Mercedes-Benz reported profit growth for Q1.
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U.S. equity futures:
- S&P 500 Futures: +19 @ 4,195
- DJIA Futures: +240 @ 33,928
- Nasdaq 100 Futures: +34 @ 13,044
Overseas:
- Europe: DAX +0.3%, FTSE +0.8%, CAC +0.5%
- Asia: Nikkei -1.2%, Hang Seng +0.1%, Shanghai Composite +2.5%
Commodities:
- Crude Oil +0.41 @ 102.11
- Nat Gas +0.066 @ 7.044
- Gold -3.90 @ 1900.20
- Silver +0.144 @ 23.688
- Copper +0.0247 @ 4.4887