U.S. stock futures edge higher as investors digest another batch of corporate earnings and await Fedspeak

U.S. stock-index futures were edging higher on Wednesday morning with bond markets calmer and investors eying more corporate-earnings reports ahead of another slate of Fed speakers.

How stock-index futures are trading

  • S&P 500 futures
    rose 15 points, or 0.3%, to 4,989

  • Dow Jones Industrial Average futures
    added 55 points, or 0.2%, to 38,669

  • Nasdaq 100 futures
    climbed 80 points, or 0.5%, to 17,740

On Tuesday, the Dow Jones Industrial Average
rose 0.4% to 38,521, the S&P 500
increased 0.23% to 4,954 and the Nasdaq Composite
gained less than 0.1% to 15,609.

What’s driving markets

With 10-year Treasury yields again consolidating around the 4.1% level as traders come to terms with the likely prospect of waiting until May for an interest-rate cut by the Federal Reserve, investors are refocusing attention on corporate prospects.

To that end, the earnings season trundles on, with traders keen to see that profits can support a market sitting near record highs.

Companies reporting figures on Wednesday include Uber Technologies
CVS Health
and Roblox before the opening bell rings on Wall Street, followed by PayPal
Walt Disney
and Arm
after the close.

Indications that the U.S. economy has managed to thrive during a period of sharply rising interest rates, thus supporting company earnings growth, has been a primary driver of the latest equity rally, according to Stephen Innes, managing partner at SPI Asset Management.

“S&P 500 operating earnings growth of around 5% year on year fosters bullish sentiment among investors,” Innes wrote in a Wednesday note. “Higher rates don’t appear to burden consumers or corporations significantly, enabling the Fed to wait longer to ensure inflation control without disrupting the stock market’s momentum amid robust U.S. growth dynamics.”

See: New York Community Bancorp’s stock closes at lowest level in 27 years as Yellen says she’s ‘concerned’ about commercial real estate risks

Investors continued to scrutinize the exposure of regional banks to the commercial real-estate sector with New York Community Bank
in free fall since reporting a surprise loss last week. Moody’s Investors Service downgraded the regional bank’s credit rating by two notches late Tuesday, lowering it into speculative-grade or “junk” status.

The bank’s shares rose 0.7% in premarket trading on Wednesday after it tried to reassure investors by naming an executive chair to its board and saying total deposits have increased in the last several weeks.

U.S. economic updates on Wednesday include the trade deficit, which rose slightly in December, but the annual gap still fell to the lowest level in three years and added to economic growth in 2023. January consumer credit is due out at 3 p.m. Eastern time.

Another raft of Federal Reserve officials will be making comments, too. New Fed governor Adriana Kugler will speak on policy and the economic outlook at 11 a.m. Eastern, Boston Fed President Susan Collins will discuss the economic outlook at 11:30 a.m., Richmond Fed President Tom Barkin will speak to the Economic Club of Washington, D.C., at 12:30 p.m., and Fed governor Michelle Bowman will talk about supporting small businesses at 2 p.m.

Companies in focus

  • Shares of Snap Inc.
    plunged over 30% in premarket trading on Wednesday after the social-media company late Tuesday reported a revenue miss and offered a disappointing outlook.

  • Ford Motor Co.
    rose 5.6% after the carmaker reported quarterly revenue above Wall Street’s expectations and announced a next-generation, smaller EV to rival Tesla Inc.’s upcoming Model 2.

  • Shares of Chipotle Mexican Grill Inc.
    were up 2.7% after the Mexican fast-casual chain delivered well-received results and forecasts.

  • Shares of Roblox Corp.
    soared 10.4% after the videogame platform easily beat quarterly bookings estimates.

  • Enphase Energy Inc. shares
    jumped 17.1% on Wednesday morning after the alternative-energy company presented investors with a mixed quarter, but one that soothed more immediate concerns about the ailing sector.

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