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The Thursday Market Minute

  • U.S. equity futures suggest a mixed session on Wall Street, with the Dow called 50 points lower and the S&P 500 indicated 5.5 points higher, amid the busiest day of the earnings seasons with 37 companies set to report including Amazon, Mastercard and ConcoPhillips.
  • GE shares surge after better-than-expected fourth quarter sales offset a 5 cent earnings miss for the struggling industrial group.
  • Global stocks extend gains as Federal Reserve signals 'patience' on future rate hikes and U.S. earnings blast forecasts despite ongoing concern over the pace of growth in China.
  • Asia stocks hit a four month high as risk appetite returns in the wake of the Fed's dovish tilt, with the U.S. dollar falling to a three week low against a basket of its global peers.
  • European stocks book modest gains despite the bullish tone as a host of blue-chip earnings around the region keep benchmarks in check and the euro rises firmly against a weaker greenback.
  • Global oil prices are back on the march, taking gains to nearly 30% since the Christmas Eve trough, as Saudi exports to the U.S. stock and domestic stockpiles continue to swell.

Market Snapshot

U.S. stocks look set for a mixed open Thursday, amid the busiest reporting session of the earnings season, even as global markets extend gains after the Federal Reserve signaled a pause in its rate hike plans and a series of blue-chip companies posted stronger-than-expected earnings and profit guidance that eased concerns over the prospect of a damaging slowdown in China.

Fed Chairman Jerome Powell that weakening global growth, alongside the lack of inflationary pressures in the United States, meant the central bank was able to "be patient" in its assessment of the need for further policy tightening, while he and his colleagues on the Open Markets Committee ditched a reference to "further gradual hikes" later this year in the official statement published Wednesday.

"We are now facing a somewhat contradictory picture of generally strong U.S. macroeconomic performance alongside growing evidence of cross-currents," Powell told reporters in Washington. "Common sense risk management suggests patiently waiting greater clarity."

The dovish tilt, which marks a significant change to the bank's stance it stressed only six weeks ago, was paired with a series of stronger-than-expected U.S. earnings both before and after the close of trading yesterday that suggested companies were either weathering the impact of a China-led slowdown in global growth or insulated enough that investors were focused on their company-specific challenges.

The collective bullishness lifted the Dow Jones Industrial Average some 434 points higher on the session and past the 25,000 mark, while the broader S&P 500 added 41 points to close at the highest level since early December.

Contracts tied to the Dow suggest a 51 point pullback for the Dow, thanks in part to a 2% slide for Microsoft Inc. MSFT, while those linked to the broader S&P 500 are indicating an increase of 5.5 points thanks to much stronger-than-expected quarter earnings from Facebook (FB) . 

Trade talks between China and the U.S. will also take center stage in Washington, with Vice Premier Lie He set to meet with President Donald Trump later today after meetings with U.S. Trade Representative Robert Lighthizer.

China's top trade negotiators are in the U.S. meeting with our representatives. Meetings are going well with good intent and spirit on both sides. China does not want an increase in Tariffs and feels they will do much better if they make a deal. They are correct. I will be......

— Donald J. Trump (@realDonaldTrump) January 31, 2019

....meeting with their top leaders and representatives today in the Oval Office. No final deal will be made until my friend President Xi, and I, meet in the near future to discuss and agree on some of the long standing and more difficult points. Very comprehensive transaction....

— Donald J. Trump (@realDonaldTrump) January 31, 2019

Facebook shares were marked 11.5% higher in after-hours trading in New York late Wednesday, indicating an opening bell price of $167.74 each, the highest since late September, after it continued to add users and advertisers despite a tidal wave of negative headlines and privacy concerns that have washed over the group over the past year.

Microsoft Inc. (MSFT) shares, however,  were indicated lower 2% lower in pre-market trading after the computing giant posted solid December quarter revenues but noted slowing growth rates for its Azure cloud offering and the impact of a strong U.S. dollar on overseas sales.

General Electric Co. (GE)  were also active, rising 7% to $9.75 each after it posted weaker-than-expected fourth-quarter earnings Thursday but noted solid sales over the period and a $1.5 billion settlement with the U.S. Department of Justice over a 2015 probe into its defunct mortgage division.

General Electric said adjusted non-GAAP earnings for the three months ended in December came in at 17 cents per share, down around 36% from the same period last year and well shy of the 22 cent Wall Street forecast. Group revenues, GE said, rose 5% to $33.28 billion, firmly ahead of the consensus forecast of $32.6 billion.

Celgene (CELG) , Amazon (AMZN) , DuPont (DWDP) , ConocoPhillips (COP) , Mastercard (MA) , Northrop Grumman (NOC) , Raytheon (TRN) and UPS (UPS) are all set to update investors throughout and after the session.

European stocks were little-change by mid-day in Frankfurt, with the Stoxx 600 benchmark slipping 0.01% as benchmarks around the region grappled with a series of top-tier corporate earnings in the busiest reporting day of the year and data showing Italy's economy slipped into technical recession over the final three months of last year.

Britain's FTSE 100 lead gainers with a 0.5% gain as basic resource stocks topped the index following record annual profits from Royal Dutch Shell plc (RDS.A) of $21.4 billion which pushed shares 2.6% higher in the opening minutes of trading in London.

Overnight in Asia, the ripple effect of the Fed's new "wait and see" stance sent the dollar index, which tracks the greenback against a basket of six global currencies, to a three-week low of 95.26 and helped lift regional stocks to the highest levels in four months, with the MSCI ex-Japan index rising 0.75% and the Nikkei 225 riding a weaker yen to a 1.06% gain by the close of trading in Tokyo.

Global oil prices were back on the march again Thursday, taking U.S. crude nearly 30% higher from its Christmas Eve nadir, after the U.S. Energy Information Administration said domestic stockpiles grew by nearly 1 million barrels last week, and are 6.6% higher from last year, while imports of Saudi crude slowed to the second lowest weekly level since records began in 2010.

Brent crude contracts for March delivery, the global benchmark, were marked 33 cents higher from their Tuesday close in New York and changing hands at $61.98 per barrel while WTI contracts for the same month were seen 10 cents lower at $54.33 per barrel.