Monday, August 8

US Futures Jump as Earnings Alleviate Stock Gloom: Markets Wrap


(Bloomberg) — US equity futures rallied Wednesday after resilient earnings from Google parent Alphabet Inc. and an upbeat outlook from Microsoft Corp. helped to salve investor sentiment somewhat.

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(Bloomberg) — US equity futures rallied Wednesday after resilient earnings from Google parent Alphabet Inc. and an upbeat outlook from Microsoft Corp. helped to salve investor sentiment somewhat.

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Contracts on the tech-heavy Nasdaq 100 added about 1.5%, while those for the S&P 500 were up more than 0.5%.

That followed a slide in the US stock market ahead of a much anticipated Federal Reserve interest-rate increase that’s feeding into concerns about a rapidly slowing global economy.

Shares in Asia look set for a choppy start as investors weigh the cross-currents. Futures for Japan, Australia and Hong Kong pointed lower.

Treasury yields and the dollar pushed higher in the Wall Street session ahead of the 75-basis-point Fed hike markets expect Wednesday. Oil hovered around $96 a barrel and Bitcoin was subdued near $21,000 after a selloff this week.

The projected Fed move to tackle price pressures would cement a combined 150 basis points increase over June and July — the steepest rise in rates since the 1980s, when then chairman Paul Volcker wrestled with sky-high inflation.

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A wave of monetary tightening, Europe’s energy woes amid Russia’s invasion of Ukraine and China’s property sector and Covid challenges are among the risks darkening the global outlook.

But US earnings so far are providing a sliver of hope — more than three-quarters of firms that have reported so far either beat or met earnings expectations.

“Inflation is hurting companies and the question is whether these policy rate hikes are going to do anything to alleviate the pain,” Quadratic Capital Management founder Nancy Davis said on Bloomberg Television.

The latest US data showed consumer confidence sank to the lowest level since February 2021. A gauge of new home sales fell for the fifth time this year. The International Monetary Fund warned the world economy may soon be on the cusp of an outright recession.

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Here are some key events to watch this week:

  • Apple, Amazon, Meta earnings due this week
  • Fed policy decision, briefing, Wednesday
  • Australia CPI, Wednesday
  • US GDP, Thursday
  • Euro-area CPI, Friday
  • US PCE deflator, personal income, University of Michigan consumer sentiment, Friday

Musk, Tesla and Twitter are this week’s theme of the MLIV Pulse survey. Also share your views on the S&P 500’s biggest stocks. Click here to get involved anonymously.

Some of the main moves in markets:

Stocks

  • S&P 500 futures rose 0.8% as of 7:17 am in Tokyo. The S&P 500 fell 1.2%
  • Nasdaq 100 futures increased 1.4%. The Nasdaq 100 fell 2%
  • Nikkei 225 futures fell 0.7%
  • Australia’s S&P/ASX 200 Index futures lost 0.5%
  • Hang Seng Index futures fell 1.4%

Currencies

  • The Bloomberg Dollar Spot Index rose 0.4%
  • The euro was at $1.0128
  • The Japanese yen was at 136.86 per dollar
  • The offshore yuan was at 6.7675 per dollar

Bonds

  • The yield on 10-year Treasuries rose one basis point to 2.81%

Commodities

  • West Texas Intermediate crude was at $95.58 a barrel, up 0.6%
  • Gold was at $1,717.99 an ounce

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