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Dow Futures Higher on Bank Earnings, Jobs Boost, Booming Retail Sales

Bank earnings continue to boost U.S. stocks this week, with markets digesting a much stronger-than-expected reading of March retail sales and improving weekly jobless claims.

The Thursday Market Minute

  • Global stocks move higher amid dormant interest rate markets and low volatility heading into a busy Thursday session dominated by bank earnings and economic data.
  • Benchmark 10-year note yields ease 1.611% overnight ahead of weekly jobless claims and March retail sales.
  • S&P 500 first quarter earnings are expected to rise 24% from last year to a share-weighted $338 billion, with a 55% surge forecast for the three months ending in June.
  • CDC data shows 76.7 million Americans have now been fully vaccinated against the coronavirus, with around 194.7 million doses administered as of Wednesday.
  • U.S. equity futures suggest a firmer open on Wall Street  following earnings from Citigroup, UnitedHealth, Delta Airlines and PepsiCo as well as better-than-expected retail sales and weekly jobless claims.

U.S. equity futures traded higher Thursday, while Treasury yields eased and the dollar slipped to a one-month low, heading into of a busy session on Wall Street dominated by another round of bank earnings and a key reading of retail sales. 

March retail sales soared 9.8% last month, the Commerce Department said, while Jobless claims for the week ending on April 10 fell to a better-than-expected 576,000.

Stocks could, in fact, test record highs again Thursday given the broader market backdrop, with tech stocks likely to benefit form benchmark 10-year note yields falling to a four-week low of 1.601% now that Coinbase  (COIN) - Get Coinbase Global Inc Report has completed its much-anticipated listing on the Nasdaq

Coinbase surged to as high as $429.54 in afternoon trading Wednesday before ending the session at $328.28 each, still 32% higher than its reference price but down 13% from its opening trade. 

With that listing out of the way, however, markets focused on the retail sales and weekly jobless claims releases as well as a spate of corporate earnings including first quarter updates from Citigroup, Bank of America  (BAC) - Get Bank of America Corporation Report, Delta Air Lines  (DAL) - Get Delta Air Lines Inc. Report, PepsiCo  (PEP) - Get PepsiCo Inc. Report and UnitedHealthcare  (UNH) - Get UnitedHealth Group Incorporated (DE) Report.

U.S. equity futures now suggest a firmer opening heading into the data deluge, with contacts tied to the Dow Jones Industrial Average indicating a 155 point opening bell gain and those linked to the S&P 500 priced for a 25 point move to the upside.

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Bank of America surprised markets with the release of their first quarter earnings report one hour ahead of schedule, with the bank posting a stronger-than-expected bottom line of 86 cents per share and unveiling plans for a $25 billion share buyback. Bank of America shares were marked 1.3% higher in pre-market trading following the release. 

Citigroup, meanwhile, jumped 2.75% to $74.90 each after it posted a tripling of its first quarter profits thanks in part to $3.85 billion in loan loss reserve releases.

Tech stocks are also on the move, with Nasdaq Composite futures indicating an 140 point advance, helped by softer Treasury yields but held down by a warning from Taiwan Semiconductor Manufacturing Co.  (TSM) - Get Taiwan Semiconductor Manufacturing Company Ltd. Report, the world's biggest chipmaker, that supply constraints will likely last well into 2022.

Elsewhere, oil prices eased from the highest levels in a month after a bigger-than-expected decline in domestic crude stocks of 5.9 million barrels last week and near-term demand forecast increases from both OPEC analysts and the International Energy Agency.

WTI crude for May delivery was marked 30 cents lower at $62.85 per barrel while Brent contracts slipped 24 cents to $66.34 per barrel. 

In Europe, stocks scaled to a fresh record peak amid stronger-than-expected earnings and optimism that billions in U.S. stimulus and low interest rates will flow into the region's economy as the pandemic wanes. 

Overnight in Asia, Japan's Nikkei 225 was little-changed on the session, closing at 29,642.69 points as optimism was sapped by speculation that the Tokyo Olympics may be cancelled amid a worrying increase in coronavirus infections heading into the springs months.