The Tuesday Market Minute
- Global stocks trade mixed, with modest gains in Asia and a dip for European benchmarks, as investors return to the first full trading day following last week's Easter break.
- Oil extends gains, taking crude to fresh 2019 highs, after the U.S. removed waivers on the purchase of Iranian exports.
- U.S. earnings continue to dominate trading this week, with around 140 companies set to report over the next three days, including Facebook, Amazon, Starbucks, Exxon and Chevron.
- U.S. equity futures suggest little change on Wall Street ahead of earnings from Verizon, Procter & Gamble, Coca-Cola and Harley Davidson as well as April services PMI data at 9:45 Eastern Time.
Global stocks traded mixed Tuesday, as oil extended gains to fresh 2019 peaks, ahead of the next wave of corporate earnings that could set U.S. equity markets up for another record run and text the Federal Reserve's patience on future rate hikes.
The U.S. State Department's decision to remove waivers on the purchase of Iranian crude, issued last November to eight different countries -- including China, India and Japan -- but set to expire on May 2, have boosted global crude prices and raised concerns over the prospect of near-term inflation as domestic gas prices surge and industrial energy costs continue to accelerate.
Brent crude contracts for June delivery, the global benchmark for oil prices, were marked 55 cents higher from their Monday close in New York and changing hands at $74.59 per barrel, the highest since October 31, while WTI contracts for the same month were seen 55 cents higher at $66.11 per barrel.
Nonetheless, Asia stocks were able to book modest gains in the overnight session, with U.S. equity futures indicating a similar bump at the start of trading on Wall Street, as investors prepared for a full slate of corporate earnings that could take the S&P 500 back towards the all time closing high of 2,930 points it reach last September.
Contracts tied to the Dow Jones Industrial Average are indicating a 12 point decline while those linked to the S&P 500, which closed at 2,907.97 last night, are guiding for a flat open for the broader benchmark.
Nasdaq Composite futures suggest little change at the opening bell, as well, ahead ahead of earnings from Verizon (VZ - Get Report) , Texas Instruments, (TXN - Get Report) , United Technologies (UTX - Get Report) as well as consumer brands giant Procter & Gamble (PG - Get Report) , planemaker Lockheed Martin (LMT - Get Report) , and Dow component Coca-Cola (KO - Get Report) .
Of the more than 80 companies reporting so far this season, nearly 80% have beaten earnings expectations, according to data from Refinitiv, while around 48.1% have topped revenue estimates. The overall pace suggests collective first quarter earnings for the S&P 500 will shrink by 1.7% from the same period last year to $309.9 billion on a share-weighted basis.
Whirpool Corp (WHR - Get Report) continued that trend after the close of trading yesterday, with the appliance maker using higher sale prices to offset rising input costs in order to post stronger-than-expected first quarter profits of $3.11 per share and confirm its full-year outlook. Shares in the group rose 8% in after hours trading to indicate an opening bell price of $150.60 each.
European stocks, however, drifted lower at the start of trading in Frankfurt, with the Stoxx 600 slipping 0.08% and benchmarks around the region recording similar percentage declines and investors returned for the first full trading day since last Thursday.
Away from equities, government bond yields edged modestly higher as oil prices extended gains and investors braced for $237 billion in new Treasury auctions this week, including $41 billion in new five year notes and $32 billion in new seven year paper.
Benchmark 10-year Treasury notes were marked at 2.58% while 2-year notes were seen trading at 2.385%, putting the slope of the so-called yield curve at around 19.3 basis points.