The Monday Market Minute
- Global stocks edge lower in thin volumes as key markets close for traditional May holidays, while U.S. markets look set for a solid start to the week following a glowing assessment of the domestic economy from billionaire investor Warren Buffett.
- Buffett tells investors that the U.S. economy is "85% of what it was" prior to the pandemic, thanks to trillions in government spending and record-low rates from the Fed.
- Around 139 S&P 500 companies will report this week, including Pfizer, Moderna, General Motors and PayPal. with March quarter earnings expected to rise 46.3% from last year to $396.2 billion.
- CDC data shows 104.75 million Americans have now been fully vaccinated against the coronavirus, with around 245.6 million doses administered as of Sunday.
- U.S. equity futures suggest firmer pen on Wall Street ahead of another busy earnings week, a speech from Fed Chair Powell at 2:20 pm Eastern time and Friday's April payroll report.
Wall Street futures moved higher Monday, powered by optimism over the strength of corporate earnings, the pace of growth in the underlying economy and the pledge of extended support from the Federal Reserve.
Trillions in government spending, record-low interest rates and ongoing purchases in the bond market that have kept financial markets in check have "resurrected" the world's biggest economy "in an extraordinarily effective way", according to billionaire investor Warren Buffett, who told his annual meeting of Berkshire Hathaway (BRK.A) - Get Berkshire Hathaway Inc. Report shareholders over the weekend that Big Tech giants such as Google (GOOGL) - Get Alphabet Inc. Report and Apple (AAPL) - Get Apple Inc. Report were "incredible in terms of what they earn on capital, ... they don’t require a lot of capital, and they gush out more money.”
Most of the S&P 500, it seems, is gushing at a pace that's well above Wall Street forecasts" with around two-thirds of the benchmark reporting March quarter earnings, 87.% have beat the Street, with profits on pace to rise 46.3% from last year to around $396.2 billion.
Around 139 companies will report this week, including Pfizer (PFE) - Get Pfizer Inc. Report, CVS Health (CVS) - Get CVS Health Corporation Report, General Motors (GM) - Get General Motors Company Report, PayPal (PYPL) - Get PayPal Holdings Inc. Report, T-Mobile US (TMUS) - Get T-Mobile US Inc. Report and Moderna (MRNA) - Get Moderna Inc. Report.
Federal Reserve Chairman Jerome Powell will speak later today from Washington, as part of the National Community Reinvestment Coalition’s 'Just Economy" conference, where he is likely to comment on dynamics in the labor market that could keep the central bank's low-rate policy well into 2023.
That, a well as the blowout first quarter earnings figures, the rapidly-accelerating vaccine rollout -- which has reached nearly 250 million Americans so far this year -- and a recovering jobs market has stocks on the rise Monday, with contracts tied to the Dow Jones Industrial Average indicating a 220 point opening bell gain.
Contacts tied to the S&P 500, meanwhile, are priced for a 25 point advance and those linked to the Nasdaq are suggesting a modest 45 point move to the upside in the wake of last week's Big Tech earnings deluge.
Tesla (TSLA) - Get Tesla Inc. Report shares were a notable pre-market mover, slipping 1.5% amid reports that production at its Berlin gigafactory will be delayed by up to six months amid a longer-than-expected regulatory approval process.
Overnight in Asia, holiday closures in China and Japan kept volumes thin, while another surge in coronavirus cases in India blunted sentiment and weighed on commodity prices, pulling Brent crude back below $67 per barrel and the MSCI ex-Japan benchmark into a 0.7% decline on the session.
In Europe, where markets in London were closed for the traditional May Bank Holiday, stocks pushed higher on the back of optimism linked to the region's accelerating vaccine rollout and a solid March quarter earnings season, where more than 71% of companies have topped profit forecasts.
The Stoxx 600 was marked 0.1% lower on the session, however, as the euro bumped to 1.2046 against a softer U.S. dollar and volumes remained thin owing to London's closure.
Away from equities, the U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.13% lower at 91.158, while benchmark 10-year notes were seen modestly lower at 1.626%.