The Wednesday Market Minute
- Global stocks mixed as corporate earnings continue to dominate market sentiment following Google's solid Q1 report last night.
- Big tech in focus with numbers from Facebook and Microsoft after the bell, and Apple and Amazon later this week.
- US dollar eases to a two-week low after first quarter GDP data showed a 4.8% contraction for the world's biggest economy.
- Global oil prices edge higher after API reports a surprise drawdown in US gasoline stocks and a smaller-than-expected increase in domestic crude inventories
- Wall Street futures suggest a firmer open after positive drug trial data from Gilead and a pre-market gain of 7% for Boeing.
U.S. equity futures bumped higher Wednesday, while the dollar eased and oil prices steadied, as investors dug in for a busy session on Wall Street with key tech and industrial earnings, a first quarter assessment of the domestic economy and a Fed policy statement.
Futures were further boosted by a statement from Gilead Sciences GILD that suggested key trails in the United States suggested 'positive results for its nascent coronavirus treatment.
Google parent Alphabet (GOOGL) - Get Report mixed first quarter earnings release last night, which indicated a 13% growth rate in revenues but a miss on the ad giant's bottom line, boosted big tech stocks overnight and looks to lead the Nasdaq Composite into a solid opening bell gain.
With Facebook (FB) - Get Report and Microsoft (MSFT) - Get Report reporting after the close of trading, and General Electric (GE) - Get Report and Boeing (BA) - Get Report updating investors prior to the start of today's session on Wall Street, earnings are once again likely to dictate the tenor of stock trading today as markets look to the Fed state at 2:00 pm Eastern time.
Boeing, in fact, looks to add around 65 points to the Dow after its shares rose 7% in pre-market trading after it said it can raise its own funds despite a $1.7 billion first quarter loss.
First quarter GDP data also gave investors get their first look at the damage the coronavirus pandemic has caused to the domestic economy, which contracted by a wider-than-expected 4.8%.
Still, even with U.S. coronavirus infections topping 1 million, by far the largest total in the world, and economists expecting at 4% contraction in GDP in the first quarter -- and the steepest recession on record once the current quarter is complete -- stocks have continued to surprise, with the S&P 500 some 28% higher from its March 23 nadir and is on pace for its best month since December 1991.
Futures contracts tied to the benchmark suggest a further 66 point advance at the start of trading, while those linked to the Dow Jones Industrial Average are indicating a 530 point opening bell gain. Google's solid first quarter numbers, and the pull they had on the broader tech sector, should boost the Nasdaq by around 200 points.
The U.S. dollar index, meanwhile, a key indicator of risk market sentiment, slipped to a near two-week low overnight of 99.72 as investors read through stronger-than-expected earnings from European bluechips such as Deutsche Bank (DB) - Get Report and AstraZeneca (AZN) - Get Report as well as the tentative re-opening plans from economies such as France and Spain.
European stocks were also modestly higher, with the Stoxx 600 0.62% ahead of last night's close in early Wednesday dealing and Britain's FTSE 100 booking a solid 1.6% advance thanks to gains from Barclays, AstraZencea and BP plc.
Global oil prices were also finding a firmer foot, thanks in part to the weaker U.S. dollar, after the American Petroleum Institute noted a smaller than expected build in domestic crude stocks and a surprise drawdown in gasoline inventories over the past week.
Front-month WTI futures contracts -- the new benchmark for U.S. prices that would have owners taking delivery of crude in June -- were last seen $2.17 higher from their Tuesday close in New York and changing hands at $14.51 per barrel.
Brent futures for June delivery, which benchmark around 60% of global crude purchases, were marked $1.51 higher at $21.97 per barrel.
Overnight in Asia, Japan's Nikkei 225 was closed for the country's Shōwa Day celebrations, removing some market liquidity around the region, while the MSCI ex-Japan benchmark was seen just a bit more than 1% higher heading into the close of trading.