The Wednesday Market Minute
- Global stocks slip lower, pulling Wall Street futures into the red, as markets prep for the first Fed rate decision of the year and a trio of key tech earnings.
- No change in policy is likely from the Fed when it publishes its decision at 2:00 PM Eastern time, but investors will be looking for a reiteration of low-rate pledges from Chairman Jerome Powell.
- Apple, Tesla and Facebook will report quarterly earnings after the bell following blowout Q2 profits last night from tech giant Microsoft.
- Global coronavirus cases top 100 million, with more than half documented in the United States and the United Kingdom.
- GameStop more than doubles in overnight trading after billionaire investors Tweet support for the money-losing video game retailer on its 700% increase over the past two weeks.
- U.S. equity futures suggest a softer open on Wall Street following quarterly updates from Boeing and AT&T and ahead of durable goods orders at 8:30 am Eastern Time.
U.S. equity futures are pointing to a weaker open on Wall Street Wednesday as investors await the first Federal Reserve policy decision of the year and prep for a trio of key tech earnings after the close of trading.
Futures extended declines, as well, following a much wider-than-expected fourth quarter loss of $15.25 per share for Boeing Co. (BA) - Get Report, which booked a $6.3 billion pre-tax charged linked to delays in its 777X widebody program.
Apple (AAPL) - Get Report, Facebook (FB) - Get Report and Tesla (TSLA) - Get Report will publish quarterly profit updates later today, following on from a much stronger-than-expected second quarter report from Microsoft (MSFT) - Get Report last night that has lifted shares in the tech and cloud giant 3.5% in pre-market trading.
Apple is expected to post a first quarter bottom line of $1.41 per share on revenues of $103.28 billion, according to Street estimates, with investors keying on the tech giant's March-quarter outlook to lift the stock into fresh record highs.
Tech stocks, in fact, are back to overtaking the broader market in terms of interest and performance, particularly now that U.S. vaccine rollouts remain uneven and the Federal Reserve has pledged to keep rates at near zero for at least the next two years.
Fed Chairman Jerome Powell will likely reiterate that vow when he speaks to the media at 2:30 PM Eastern time following what is expected to be an uneventful policy decision thirty minutes earlier.
Microsoft's profits, largely driven by cloud and personal computing gains, underscored the impact of 'work-from-home' dynamics on the tech sector and look to support the Nasdaq Composite index heading into the start of trading.
Slower vaccine rollouts in the U.S. and Europe, which comprise more than half of the now 100 million documented coronavirus infections, suggest those dynamics will remain imbedded in tech and 'work-from-home' stocks for many months to come.
Futures contracts tied to the Dow Jones Industrial Average suggest a 260 point opening bell decline, while those linked to the S&P 500 are indicating a 36 point pullback. Nasdaq Composite contracts, however, suggest a 94 point dip for the tech-focused benchmark.
GameStop (GME) - Get Report shares were back on the march in pre-market trading, extending one of Wall Street's historic two-week gains with a 173% overnight surge in heavy trading volume, fueled by Tweets from billionaire investor Cameron Winkelvoss and Tesla founder and CEO Elon Musk.
Overnight in Europe, stocks drifted lower amid grim COVID headlines and political tensions linked to vaccine distribution, with the Stoxx 600 falling 1.4% by mid-day trading and Britain's FTSE 100 sliding 1.33%.
Overnight in Asia, a mixed session saw the Nikkei 225 in Tokyo rising 0.31% to close at a near three-decade high of 28,635.21 points while the region-wide MSCI ex-Japan benchmark fell 0.7% into the final hours of trading.
Away from equities, the U.S. dollar index added to recent gains, rising 0.4% to 90.4092 against a basket of global currencies as risk appetite gave way to caution heading into the Wednesday session, while benchmark 10-year Treasury bond yields fell to 1.023%.
Global oil prices popped higher, however, after the American Petroleum Institute said domestic crude stocks fell by a bigger-than-expected 5.3 million barrels last with, lifting U.S. crude prices by 28 cents in overnight trading to $52.89 per barrel.