The Thursday Market Minute
- Global stocks grin higher as corporate earnings gains offset ongoing concerns over the increase in COVID infections, particularly in Asia.
- European earnings continue to impress, with Nestle, SAP and Renault boosting regional market gains following the ECB's April interest rate decision.
- Benchmark 10-year note yields ease to 1.555% in overnight trading following a solid 20-year auction Wednesday and a steady U.S. dollar.
- Oil prices extend slide, falling for a third consecutive session amid energy demand concerns and a surprise increase in domestic U.S. crude stockpiles.
- CDC data shows 87.6 million Americans have now been fully vaccinated against the coronavirus, with around 216 million doses administered as of Wednesday.
- U.S. equity futures suggest a mixed open on Wall Street following earnings from AT&T, Danaher and DR Horton as well as stronger-than-expected weekly jobless claims.
Futures, however, are repeating a pattern seen throughout much of the week as stock markets around the world remain sensitive to a spate of impressive corporate earnings while closely tracking global growth prospects amid a stubborn resurgence in coronavirus infections.
Weekly jobless claims fell to 547,000 for the period ending on April 17, pulling the four-week average to 651,000. AT&T shares, meanwhile, surged more than 4% after a better-than-expected first quarter earnings report highlight by a sharp uptake in subscribers for its HBO Max streaming service.
European stocks, in fact, rebounded from an early-week malaise Thursday to test fresh all-time highs following stronger-than-expected first quarter earnings from regional heavyweights such as Nestle (NSRGY) - Get Report and SAP SE (SAP) - Get Report and data showing an untick in vaccine rollouts.
The gains held after the European Central Bank's April policy decision, expected at 7:45 am Eastern time, which indicated no hints to change to the bank's €1.85 trillion pandemic bond-buying program that has kept market interest rates pinned below 0%.
In the U.S, weekly jobless claims data showed continued improvements in the labor market, as states and municipalities continue to ease business restrictions that allow for more hiring, while existing home sales figure at 10:00 am will provide further evidence of the nation's housing market boom.
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S&P 500 earnings, in fact, are likely to rise more than 31% from last year to a share-weighted $354.5 billion, while Stoxx 600 earnings in Europe are on pace for their best quarterly gain in nearly a decade.
AT&T (T) - Get Report, Danaher (DHR) - Get Report, Freeport-McMoran (FCX) - Get Report, DR Horton (DHI) - Get Report and Biogen (BIIB) - Get Report highlight the pre-market earnings calendar, with an update from chipmaker Intel (INTC) - Get Report expected after the close of trading.
Futures contracts tied to the Dow Jones Industrial Average suggest a modest 55 point pullback following yesterday's gains, which snapped a two-day losing streak, while those linked to the S&P 500 are priced for a 1 point gain.
Nasdaq Composite futures are suggesting a 10 point retreat as tech stocks loosen their day-to-day sensitivity to interest rate moves, given that benchmark 10-year Treasury note yields are holding at a five-week low of 1.556%.
Oil prices were also on the back foot, falling for a third consecutive session amid concerns over the pace of energy demand in key markets such as India and Japan, where coronavirus cases are rising quickly, and data showing domestic U.S. crude stocks rising at a surprisingly high pace of 594,000 barrels last week.
WTI crude for June delivering was marked 27 cents lower at $61.10 per barrel while Brent contracts for the same month fell another 25 cents to $65.07 per barrel.
In Europe, the Stoxx 600 was marked 0.45% higher in Frankfurt with Nestle powering regional gains on the back of a 3% rise following the strongest quarterly sales gains in a decade. Cloud and enterprise software group SAP SE was also on the move, rising 1.4%, after solid quarterly earnings and a reiteration of its full-year sales guidance.
Overnight in Asia, stocks rode the tailwind of yesterday's rally on Wall Street, with the Nikkei 225 rising 2.38% to 29,188.17 despite media reports that suggest officials are set to issue their third 'state of emergency' order for the Japanese capital amid a rise in COVID infections that could still threaten the fate of the Olympic Games.