Dow Futures Gain as Investors Track Economic Re-openings, Central Bank Stimulus: Apple Earnings Highlight Key Reporting Week

Investors will parse through a busy week of corporate earnings, Fed and ECB meetings, along with further indications as to when, and how, the world's biggest economy will eventually return to full-speed.

The Monday Market Minute

  • Global stocks book solid gains after the Bank of Japan launches a new stimulus push and economies around the world slowly look to re-start activity as the coronavirus pandemic begins to ease.
  • The BoJ said Monday it will buy an unlimited amount of government bonds, and triple the pace of its corporate debt purchases, in order to prevent a sharper coronavirus-lead downturn.
  • European stocks gain as key economies slowly re-opening businesses and factories, but U.K. Prime Minister Boris Johnson says U.K. restrictions likely to remain in place for many weeks.
  • U.S. earnings in focus this week with 169 S&P 500 companies reporting, including Apple, Microsoft, Amazon and Facebook.
  • Wall Street futures suggest a modestly firmer open ahead of the weekly earnings rush and the Federal Reserve's two-day meeting , which begins Tuesday.

U.S. equity futures bounced higher Monday, while global stocks booked solid gains in markets around the world, as investors reacted to a massive stimulus push from the Bank of Japan and suggestions that key parts of the domestic economy could re-open in the coming week.

New York Governor Anderw Cuomo told reporters in Albany Sunday that a phased re-opening of the state's economy could come as early as May 15, while other states around the country have either eased certain outdoor activity restrictions or set out plans for the gradual re-start of jobs, businesses and public schools.

The modestly positive movement belies data that still suggests coronavirus cases are accelerating -- 27,600 alone were reported in the U.S. on Sunday, taking the cumulative total to just over 930,000 -- and the fact that a vaccine is still likely many months away. 

Still, with several European countries gingerly lifting 'stay-at-home' restrictions, and governments and central banks around the world still providing trillions in liquidity and fiscal support, stocks look set to start the week on a solid footing.

Futures contracts tied to the Dow Jones Industrial Average, which has gained 8.5% so far this month, suggest a 205 point opening bell gain for the 30-stock average while those linked to the S&P 500 are guiding to a 25 point advance for the broader benchmark. 

Corporate earnings are likely to be in focus again this week, alongside the grim calculation of coronavirus death and infection rates, with some 169 S&P 500 companies expected to report quarterly profits this week, including heavyweights such as Apple  (AAPL) - Get Report, Microsoft  (MSFT) - Get Report, Amazon  (AMZN) - Get Report and Facebook  (FB) - Get Report.

First quarter earnings, however, are still on pace to decline around 14.8% from last year, according to Refinitiv, with a another 33.3% contraction forecast for the three months ending in June. 

European stocks were firmly bid in overnight trading, with the Stoxx 600 rising 1.5% and Germany's DAX performance index gaining 2.1% thanks in part to stronger-than-expected first quarter earnings from Deutsche Bank.

Stocks also got a boost from the earlier announcement from the Bank of Japan that it will start buying unlimited amounts of government bonds, and triple the pace of its corporate debt purchases, in order to ignite growth and protect the economy against a sharp coronavirus downturn.

Britain's FTSE 100 was also off to a solid start in London, although another slump in global oil prices, and a sober assessment on the re-opening of the domestic economy from returning Prime Minister Boris Johnson, kept a lid on gains for the London benchmark, which was marked 1.6% higher in mid-morning trading.

Global oil prices were once again trading deeply in the red, with investors citing concerns over a lack of storage space, particularly in the United States, in which to house unwanted crude following last week's jump in domestic inventories and the ongoing slump in demand. 

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 $2.28 lower from their Friday close in New York and changing hands at $14.66 per barrel in early European trading.

Brent futures for June delivery, which benchmark around 60% of global crude purchases, were marked 66 cents lower at $20.78 per barrel after briefly trading as low as $15.98 last week, the weakest since 1999.

Overnight in Asia, the Bank of Japan's stimulus push helped boost the Nikkei 225  to a 2.7% Monday gain, with the benchmark closing at 19,783.22 points, while the region-wide MSCI ex-Japan index was last seen 1.75% higher heading into the close of trading.