US futures rise as big-tech earnings bolster mood: Markets wrap

US equity futures gained as strong earnings from tech majors Alphabet Inc. and Microsoft Corp. after the Wall Street close reassured investors about the health of the economy.

Contracts on the S&P 500 climbed about 0.3% after the index fell the most in two months Tuesday, driven in part by First Republic Bank’s 49% plunge. Nasdaq 100 futures were up more than 1%. Google parent Alphabet and Microsoft both rose in post-market trading after providing an auspicious start to the Big Tech earnings season. Worries over regional banks eased somewhat after PacWest Bancorp said deposits rebounded in April.

In Europe, stocks declined for a third day amid disappointing earnings. Software producer Dassault Systemes sank more than 6% after missing revenue estimates. Dutch chip-tool maker ASM International slumped more than 10% after offering a tepid outlook for the rest of the year. Beats from Standard Chartered Plc and Sweden’s SEB AB failed to bolster sentiment.

First Republic Bank’s warning on deposit outflows had reignited concerns about the health of the regional banking system after weeks of calm. The bank is exploring an asset sale of up to $100 billion of long-dated mortgages and securities as part of a rescue plan, Bloomberg reported Tuesday.

“The markets are very much focused on some of the earning story, but possibly overlooking the weight of economic deceleration that is playing through right now, particularly in the United States,” John Woods, Asia Pacific chief investment officer at Credit Suisse Group AG, said on Bloomberg Television. “I’m looking at a whole range of technical signals, which seem to be suggesting a risk-off environment.”

Treasuries were little changed after the benchmark 10-year yield fell nine basis points Tuesday and the policy-sensitive two-year yield dropped 13 basis points. A gauge of the dollar declined.

Boeing Co. and Meta Platforms Inc. are among companies to report earnings later Wednesday.

In Asia, South Korea after battery maker LG Energy Solution Ltd. posted first-quarter net income that beat analysts’ estimates and Apple Inc.-supplier SK Hynix Inc. forecast a rebound in the memory-chip sector later this year.

Oil edged higher, clawing back some of a drop on Tuesday. Gold was little changed.

Key events this week:

• Eurozone economic, consumer confidence, Thursday
• US initial jobless claims, GDP, Thursday
• Bank of Japan meets on interest rates, Friday
• Euro-area GDP, Friday
• US personal income, Friday

Earnings highlights:

• Wednesday: Boeing, Meta, Hilton
• Thursday: Amazon, American Airlines, Intel, Mastercard, Southwest Airlines, Hershey, Honeywell, Barclays

Some of the main moves in markets:

Stocks

• The Stoxx Europe 600 fell 0.7% as of 8:24 a.m. London time
• S&P 500 futures rose 0.3%
• Nasdaq 100 futures rose 1.1%
• Futures on the Dow Jones Industrial Average were little changed
• The MSCI Asia Pacific Index fell 0.1%
• The MSCI Emerging Markets Index rose 0.2%

Currencies

• The Bloomberg Dollar Spot Index fell 0.2%
• The euro rose 0.4% to $1.1022
• The Japanese yen rose 0.1% to 133.57 per dollar
• The offshore yuan rose 0.2% to 6.9290 per dollar
• The British pound rose 0.4% to $1.2455

Cryptocurrencies

• Bitcoin rose 1.3% to $28 337.63
• Ether was little changed at $1,860.58

Bonds

• The yield on 10-year Treasuries was little changed at 3.40%
• Germany’s 10-year yield declined four basis points to 2.35%
• Britain’s 10-year yield declined one basis point to 3.68%

Commodities

• Brent crude rose 0.3% to $81.04 a barrel
• Spot gold was little changed

© 2023 Bloomberg