US Futures Gain as Tech Raises Cautious Optimism: Markets Wrap

(Bloomberg) — U.S. stock futures rose at the end of a tumultuous week, as Amazon.com Inc. and Intel Corp. reported strong earnings. The price of crude oil rose as the United States launched strikes on Iran-linked facilities in Syria.

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Nasdaq futures rose 0.8% after a sell-off that pushed the index to its lowest levels since May. The decline also put the S&P 500 on the brink of a “correction,” with the index down nearly 10% from its peak in July.

The Stoxx Europe 600 Index fell at the open as disappointing earnings continued. NatWest Group Plc fell after cutting margin guidance as rising interest rates sparked competition for deposits. Universal Music Group NV, Taylor Swift’s record label, fell after missing some estimates. On the positive side, major energy companies advanced as Brent crude rose more than 1% to near $90 per barrel.

Earnings season has proven to be mixed so far, with investors punishing mistakes more harshly than rewarding results. In the United States, 78% of companies beat estimates, compared with 57% in Europe, according to strategists at JPMorgan Chase & Co. But a larger-than-usual number of companies pointed to lower consumer demand and a deteriorating economic environment, although data released on Thursday indicated continued price pressures in the United States despite strong economic growth.

The focus now turns to a raft of reports today, including the Fed’s preferred measure of underlying price pressures, to bolster bets that the central bank will pause next week.

Resilient US growth and earnings ahead of some US tech giants “provide long-awaited relief to stressed-out investors,” said Hebei Chen, an analyst at IG Markets in Melbourne. “As we approach the end of the month, investors are holding their breath for next week’s FOMC meeting, which is expected to set the tone for the rest of the year.”

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Shares in Hong Kong and Japan led gains in Asia, while Australian and South Korean shares also rose. Mainland Chinese stocks rose after data on industrial company profits showed growth, although slightly weaker than in the previous period.

Treasury yields rose and the dollar was steady, with swaps forecasting a roughly one in three chance of the Fed raising again in the current tightening cycle, according to data compiled by Bloomberg.

The yen stabilized after inflation in Tokyo, an indicator of Japanese consumer cost pressures, accelerated unexpectedly for the first time in four months. Japanese Finance Minister Shunichi Suzuki confirmed that officials are monitoring currency movements with a great sense of urgency.

Meanwhile, traders are closely monitoring geopolitical developments in the Middle East, where the Israeli military said it killed Hamas’s deputy intelligence chief, who it said was responsible for helping plan the October 7 attacks. During the night, the army launched a limited ground raid on northern Gaza, while Iran escalated its tone with the United States.

Main events this week:

• US Personal Consumption Expenditures Deflator, Personal Spending and Income, University of Michigan Consumer Confidence, Friday

• Exxon Mobil earnings on Friday

Some key movements in the markets:

Stores

• The Stoxx Europe 600 Index was down 0.3% as of 8:16 a.m. London time

• S&P 500 futures rose 0.4%

• Nasdaq 100 futures rose 0.7%.

• Dow Jones Industrial Average futures rose 0.1%

• The MSCI Asia Pacific Stock Index rose 1.1%.

• MSCI Emerging Markets Index rises 0.9%

Currencies

• The Bloomberg Dollar Spot Index was little changed

• There was little change in the euro at $1.0558

• The Japanese yen rose 0.1 percent to 150.21 yen to the dollar

• There was little change in the yuan in external transactions at 7.3229 to the dollar

• The British pound fell 0.1 percent to $1.2116

Digital currencies

• Bitcoin was little changed at $34,183.54

• Ethereum fell 0.2% to $1,794.36

Bonds

• The yield on the 10-year Treasury note rose four basis points to 4.88%.

• The yield on 10-year German bonds was little changed at 2.86%.

• There was little change in the yield on British bonds for 10 years at 4.59%.

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This story was produced with assistance from Bloomberg Automation.

–With assistance from Tasya Sibahutar and Georgina MacKay.

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