The Wednesday Market Minute
- Global stocks mixed amid solid earnings and rising corporate optimism ahead of today's Fed policy meeting.
- CDC changes guidelines on masks as Delta infections surge, clouding recovery timeline.
- China stocks rally, snapping three-day losing streak, but Beijing's financial market crackdown continues to pound sentiment.
- Fed Chair Jerome Powell speaks to reporters at 2:30 PM Eastern time, with investors looking for signals as to how -- or if -- rising Delta-variant infections will alter policy goals.
- Apple slides on chip caution after record June quarter, while Google surges after smashing Street forecasts for ad sale growth.
- U.S. equity futures suggest a modestly firmer open on Wall Street following second quarter earnings from Boeing, Pfizer, McDonald's and Bristol-Myers.
U.S. equity futures edged higher Wednesday, as investors absorbed a trio of record quarterly earnings from a trio of tech giants while anxiously adjusting growth and inflation prospects amid a change in mask guidance from the CDC and rising Delta-variant infections in major economies around the world.
Dow futures were also given a lift by the first quarterly profit for planemaker Boeing (BA) - Get Boeing Company Report in more than two years, powered by a rebound in aviation demand the took group revenues to a Street-beating $17 billion.
Tuesday's recommendation from the Centers for Disease Control and Prevention that vaccinated Americans should wear masks indoors, and that school children should don them later this fall, provided a stark reminder of the variant's acceleration and its potential to uproot the hard-won recovery underpinning this corporate impressive earnings season.
It may also affect the Federal Reserve's timing on signaling any changes to its accommodative policy stance, which includes record low interest rates, billions in monthly bond purchases and myriad forms of liquidity support for the broader financial system.
Fed Chairman Jerome Powell will take questions from the media at 2:30 PM Eastern time later today, some 30 minutes after the central bank reveals its latest decision on interest rates.
In the meantime, market focus will remain squarely on the U.S. earnings calendar, both in terms of last night's record-setting June quarter reports from Apple (AAPL) - Get Apple Inc. (AAPL) Report, Microsoft (MSFT) - Get Microsoft Corporation (MSFT) Report and Alphabet (GOOGL) - Get Alphabet Inc. Class A Report and today's bluechip slate, which includes Boeing, Pfizer (PFE) - Get Pfizer Inc. Report and McDonald's (MCD) - Get McDonald's Corporation (MCD) Report before the bell and Ford (F) - Get Ford Motor Company Report Facebook (FB) - Get Facebook, Inc. Class A Report after the close of trading.
Futures contracts tied to the Dow Jones Industrial Average suggest a modest 25 point opening bell bump, while those linked to the broader S&P 500 are priced for a 5 point gain.
The tech-focused Nasdaq is likely to open a bit more firmly, with a 60 point bump to the upside, following last night's prints, with Alphabet leading the charge with a 4% pre-market gain.
The Google parent posted a Street-beating 70% rise in advertising sales, which topped $50 billion, helping overall revenues rise 61.6% to $61.88 billion and boosting the group's bottom line to $18.5 billion.
Microsoft, too, was trading in the green, albeit with a modest 0.3% gain, after an impressive June quarter earnings report that showed 50% growth for its Azure cloud business, topline revenues of $46.2 billion and Street-beating bottom line of $2.17 per share.
Apple, however, is holding down gains across the board after CEO Tim Cook cautioned -- much like Tesla CEO Elon Musk earlier this week -- that the global semiconductor shortage would impact the iPhone maker's ability to meet customer demand over the three months ending in September. Shares in the group were marked 1% lower at $145.30 each.
The warning clouded another record quarter for the world's most-valuable tech company, which saw revenues rise 36% from last year to $81.4 billion, thanks in part to a 50% surge in iPhone sales.
In Europe, solid earnings lifted the Stoxx 600 to a 0.4% gain in early Frankfurt trading, paced by bank and tech stocks after British lender Barclays (BCS) - Get Barclays PLC Sponsored ADR Report topped second quarter earnings forecast and resumed shareholder payouts and Germany's Deutsche Bank (DB) - Get Deutsche Bank AG Report posted a better-than-expected pre-tax profit of €1.2 billion.
Overnight in Asia, regional stocks snapped a three day losing streak amid volatile trading in China triggered by Beijing's crackdown on tech, education and property companies as officials attempt to reign-in risks to the financial markets, with the MSCI ex-Japan index rising 0.3% heading into the final hours of trading.
In Tokyo, however, where Delta-variant infections rose to a record high of more than 3,100 for a second consecutive day, the Nikkei 225 slumped 1.39% to close at 27,586.66 points.