The Tuesday Market Minute
- Global stocks mixed heading into the most important three-day stretch of the year on Wall Street amid rush of big tech earnings and the start of the Federal Reserve's policy meeting.
- Microsoft, Google, Facebook, Apple and Amazon will update March quarter earnings between today and Thursday, while the Fed will grapple with faster inflation signals and a roaring domestic economy.
- Benchmark 10-year note yields hold at 1.585% in overnight trading ahead of a $62 billion auction of 7-year notes later today while the dollar rebounds 0.2% from multi-week lows against a basket of its global currency peers.
- Oil prices move higher ahead of OPEC meeting that could adjust the cartel's output increases as India's COVID crisis deepens and world demand softens.
- CDC data shows 95.9 million Americans have now been fully vaccinated against the coronavirus, with around 230.7 million doses administered as of Monday.
- Tesla shares slide after a solid first quarter earnings report unveiled millions in bitcoin and credit sales that boosted its bottom line.
- U.S. equity futures suggest a modestly firmer open on Wall Street ahead of a wave of big tech and industrial earnings, the start of the Fed's two-day policy meeting and consumer confidence data at 10:00 am Eastern time.
U.S. equity futures were mixed Tuesday, while the dollar found favor among its global currency peers and Treasury yields bumped higher, as markets headed into what Jim Cramer called "the most important 72 hours of the year".
Big tech earnings, highlighted by Google (GOOGL) - Get Report and Microsoft (MSFT) - Get Report tonight and Apple (AAPL) - Get Report and Facebook (FB) - Get Report tomorrow, as well as a Federal Reserve policy meeting and a spate of industrial and pharmaceutical updates over the next three days will set the tone for market performance between now and the end of the year following record high closes for the S&P 500 and the Nasdaq.
All of this, too, is set against a $62 billion auction of 7-year Treasury notes later today that has, in the past, triggered sharp equity market declines in the wake of weak investor demand.
At present, analysts aren't expecting any changes from the Fed's accommodative policy, which includes record-low interest rates and $120 billion a month in bond purchases, but any suggestion of a near-term change in focus, or discomfort at the pace of rising consumer prices, coupled with muted outlooks from any of the FAANG names reporting over the next three days, could provide the sternest test to equity market momentum in more than a year.
Futures are indicating a cautiously positive start to the session, however, with contacts tied to the Dow Jones Industrial Average suggesting a 13 point opening bell slip and those linked to the S&P 500 price for a 2.5 point bump to the upside.
General Electric (GE) - Get Report, Eli Lilly (LLY) - Get Report, UPS (UPS) - Get Report , 3M Co. (MMM) - Get Report and Raytheon Technologies (RTX) - Get Report will report March quarter updates prior to the start of trading, with Starbucks (SBUX) - Get Report, Visa (V) - Get Report and Texas Instruments (TXN) - Get Report joining Google and Microsoft after the closing bell.
First-quarter S&P 500 profits are expected to rise 34% from last year to a share-weighted $362.8 billion, according to Refinitiv forecasts, and 85.4% of the 125 companies that have reported so far have topped Street forecasts.
- Tesla, AMD, Google, General Electric - 5 Things You Must Know Tuesday.
- General Electric Tops Earnings Forecast, Repeats Guidance; Shares Slide
- Eli Lilly Misses Earnings Forecast, Lowers Full-Year Profit Guidance
- United Parcel Service Surges After Handily Beating Profit Estimates
Nasdaq Composite futures are looking at a 13 point gain following last night's record close of 14,138.78 points, with Tesla (TSLA) - Get Report shares holding down gains amid a 2.8% pre-market decline in the wake of last night's first quarter earnings release.
Tesla posted a much stronger-than-expected bottom line of 93 cents per share, but the sale of environmental credits, bitcoin and tax breaks comprised around 27% of that total, according to Credit Suisse, adding to questions over the carmaker's path to sustainable profitability.
Investors are also keeping a keen eye on commodity prices this week as the Fed attempts to hold its nerve in the face of faster inflation signals and a roaring domestic economy, with copper prices on the London Metals Exchange rising to the highest levels in 10 years and global crude prices inching back over the $66 per barrel mark ahead of today's OPEC meeting in Vienna.
In Europe, stocks were largely stuck in a holding pattern as the Fed begins its two-day meeting in Washington and investors look to big tech earnings later tonight, with markets focused on a surprise $774 million hit from UBS linked to the investment bank's role in the collapse of the Archegos Capital hedge fund and solid gains for travel and leisure stocks amid hopes of a lifting of restrictions on north American visitors later this spring.
Overnight in Asia, Nomura (NMR) - Get Report added its name to the list of casualties linked to Archegos, unveiling a $2.3 billion loss from its role as prime broker to the failed hedge fund that triggered its weakest quarterly earnings since the global financial crisis.
Japan's Nikkei 225 fell 0.46% on the session to close at 28,991.89 points while the region-wide MSCI ex-Japan benchmark slipped 0.04% heading into the final hours of trading.