European stocks are set to open higher Monday, while U.S. equity futures pointed to a positive session to start the week on Wall Street, as investors braced for a busy slate of corporate earnings over the next five days and re-set expectations for interest rates and inflation amid an ongoing surge in global oil prices.
Major benchmarks in Europe are expected to open around 0.2% to the upside, according to financial bookmakers IG, with energy and financial shares likely to lead the advance as crude continues to hold past three year highs following last week's meeting of OPEC officials in Jeddah. Crude's 14.4% rally over the past six weeks has also lifted global government bond borrowing costs, taking benchmark 10-year U.S. Treasury yields to 2.966%, the highest since 2014, and lifted the dollar index, a measure of the greenback against a basket of six global currencies, to a multi-week high of 90.38.
Those moves will likely both help and hurt U.S. markets on Wall Street today, with energy and financials leading gainers and pushing futures contracts tied to the Dow Jones Industrial Average 82 points higher from Friday's 24,462.94 close. Contracts tied to the broader S&P 500 were also seen 0.3% higher in early trading ahead of a week in which 180 companies will report first quarter earnings, including major "FAANG" tech stocks such as Amazon (AMZN) , Google parent Alphabet (GOOGL) and Facebook (FB) .
The current earnings season has started off strongly, with 80% of the S&P 500 companies reporting having beaten Street forecasts, according to data compiled by FactSet, compared to the five year average.
"In terms of sales, more companies (72%) are reporting actual sales above estimates compared to the five-year average," FactSet noted in a recent update. "In aggregate, companies are reporting sales that are 1.6% above estimates, which is also above the five-year average."
A strong earnings season for tech stocks, however, will likely be necessary for U.S., and indeed global, markets to sustain their current rally as the sector comes under increasing pressure over concerns linked to data use by social media firms and suggestions that smartphone demand may be waning as the so-called "supercycle" for the global semi conductor industry comes to an end.
Overnight in Asia, part of that dynamic was in place as benchmarks around the region faded in the face of weak tech stocks -- particularly companies in Apple's (AAPL) supply chain following last week's research note from Morgan Stanley's Katy Huberty which forecast "materially" weaker iPhone sales.
The broadest measure of regional stocks, the MSCI Asia ex-Japan index, slipped 0.32% into the close of trading Monday while Japan's Nikkei 225 fell 0.2% to close at 22,114.03 points on the first session of week.
Oil prices, however, remained close to the their three year peaks, despite last week's Twitter salvo against OPEC from President Donald Trump, with Brent crude contracts for June delivery marked at $74.00 a barrel and WTI contracts for the same month trading modestly lower from Friday's close at $68.30 per barrel.