The Thursday Market Minute
- Global stocks power higher after the Fed repeats its pledge to keep interest rates at record lows for the next two years and President Joe Biden outlines another trillion-dollar spending plan.
- Fed Chairman Jerome Powell shrugged off concerns for faster inflation as "transitory" and said the policy isn't likely to change until the labor market returns to full employment.
- Apple and Facebook add to the tech sector's earnings dominance this quarter with blowout profits and increased market share, lifting the Nasdaq to a potential record high.
- CDC data shows 98 million Americans have now been fully vaccinated against the coronavirus, with around 234.7 million doses administered as of Monday.
- U.S. equity futures suggest a firmer open on Wall Street ahead of earnings from Bristol-Myers, Caterpillar, Merck and McDonald's as well as weekly jobless claims and first quarter GDP data at 8:30 am Eastern time.
Wall Street futures powered higher Thursday heading into the busiest earnings day of the year fueled by blowout tech profits, a dovish Federal Reserve and fresh spending ambitions from President Joe Biden.
Biden's $1.8 trillion 'American Families' plan, outlined in a joint session of Congress last night, is unlikely to work its way through Republican opposition in its current form, but any further boost to government spending, coupled with the Federal Reserve's pledge to keep interest rates at record lows for at least the next two years, provides a powerful backdrop for near-term stock performance, even with benchmark indices at record highs.
Much stronger-than-expected March quarter earnings from tech giants Apple (AAPL) - Get Apple Inc. Report and Facebook (FB) - Get Meta Platforms Inc. Report last night only confirmed that thesis, with the former unveiling a $90 billion stock buyback program on top if its forecast-beating iPhone sales that reached nearly $48 billion.
Weekly jobless claims for the period ending on April 24 fell to 553,000, pulling the four-week average to 611,750, while the advanced reading of first quarter GDP showed a 6.4% growth rate, much higher than the 6.1% initial estimate.
In fact, the three-day period, which TheStreet's founder, Jim Cramer, had called the most important 72 hours of the year, has delivered forecast-beating tech earnings, an accommodative Fed statement, co-operative bond yields and a big boost in consumer confidence.
Wall Street is braced for another wave of corporate earnings Thursday -- as well as weekly jobless and first quarter GDP data -- as it parses through yesterday's Fed statement and Jerome Powell press conference while looking towards a notable benchmark in the coronavirus pandemic: the full vaccination of 100 million Americans, which is likely to come as early as Friday morning.
In the meantime, with earnings from Caterpillar (CAT) - Get Caterpillar Inc. Report, Bristol-Myers (BMY) - Get Bristol-Myers Squibb Company Report and Merck (MRK) - Get Merck & Company Inc. Report before the bell, and a March quarter update from Amazon (AMZN) - Get Amazon.com Inc. Report that rounds out FAANG reporting at the close of trading today, Wall Street futures are looking at a solid start to the Thursday session.
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- McDonald's Tops Earnings Forecast as U.S. Same-Store Sales Surge
- Bristol Myers Misses Earnings Forecast, Repeats 2021 Profit Guidance
- Apple Smashes Earnings Forecast; China Demand Powers iPhone Sales
- Facebook Surges on First-Quarter Earnings Beat
Futures tied to the Dow Jones Industrial Average suggesting a 170 point opening bell gain while those linked to the S&P 500 are priced for a 32 point bounce.
Nasdaq Composite futures, which are the most sensitive to interest rate hikes, are indicating a firmer 150 point advance, powered by a 2.8% pre-market gain for Apple and a 7.1% surge for Facebook.
Ford Motor (F) - Get Ford Motor Company Report shares were another notable pre-market mover, falling 2.4% after a stronger-than-expected first quarter earnings report that was marred by forecasts that trimmed its vehicle production by 1.1 million units owing to the global semiconductor shortage.
Away from equities, the Fed's insistence that the economy remains a long way from a full post-pandemic recovery, alongside assurances that inflation could run hot later this year and still not trigger a change in policy, tamed a reaction from the bond market overnight, with benchmark 10-year note yields holding at 1.65%.
In Europe, stronger-than-expected earnings from oil majors BP, Shell and Total this week, as well as the Fed's dovish message and improving regional vaccination rates, has the Stoxx 600 up 0.4% Thursday and within touching distance of a fresh all-time high.
In Asia, Japan's markets were close for the annual Showa Day holiday that celebrates the Emperor's birthday, while the region-wide MSCI ex-Japan benchmark climbed 0.42% higher in muted volumes.