Friday July 19th

19-07-2019

Stocks set to rise at the open, Microsoft shares gain on earnings

U.S. stock index futures pointed to a higher open on Friday as the earnings season continued with Microsoft posting strong quarterly results. Dow Jones Industrial Average futures rose 71 points, implying a gain of 62 points at the open. S&P 500 and Nasdaq 100 futures also indicated gains at the open. Microsoft shares rose nearly 3% in the premarket after the tech giant posted quarterly earnings and revenue that topped analyst expectations. The company’s results were driven by a 39% year-over-year surge in cloud revenue. American Express, another Dow component, also reported better-than-expected earnings. However, the company’s stock slipped 0.8% in the premarket. More than 15% of S&P 500 companies have reported earnings thus far. Of those companies, 79% have posted a better-than-expected profit, according to FactSet data. Still, the major averages were on pace to post slight weekly losses. Stocks eked out small gains in the previous session after New York Federal Reserve President John Williams said the central bank needed to “act quickly”when the economy was slowing and rates were low, adding in a speech that it is “better to take preventative measures than wait for disaster to unfold.” Those comments initially led traders to price in a greater possibility that the Fed would cut interest rates by 50 basis points at the end of the month. However, a spokesperson for the New York Fed moved to cool the speculationarising from Williams’ comments, telling CNBC that he was drawing from academic research, not hinting at potential policy actions at the upcoming Federal Open Market Committee (FOMC) meeting. Stocks in major Asia Pacific markets made strong gains on Friday, as comments from a U.S. Federal Reserve official led to rising expectations the central bank could ease monetary policy more than expected. The Nikkei 225 in Japan added 2% to close at 21,466.99. The Topix index also rose 1.94% to finish its trading day at 1,563.96. In mainland China, shares gained on the day. The Shanghai composite rose 0.79% to about 2,924.20, while the Shenzhen composite added 0.751% to 1,560.27. The Shenzhen component also gained 0.81% to 9,228.55. Over in Hong Kong, the Hang Seng index advanced 1.03%, as of its final hour of trading. In South Korea, the Kospi closed 1.35% higher at 2,094.36. Oil prices rose on Friday as tensions brewed again in the Middle East after a U.S. Navy ship destroyed an Iranian drone in the Strait of Hormuz, a major chokepoint for global crude flows. Benchmark crude prices were still on track for their biggest weekly decline in seven weeks, having fallen sharply earlier in the week on hopes for easing Middle East tensions as well as demand concerns and a dwindling U.S. storm impact. Brent crude futures were up 81 cents, or 1.3%, at $62.74 a barrel by 0642 GMT, having risen to $63.32. Brent fell 2.7% on Thursday, falling for a fourth straight session, and was set for a weekly drop of more than nearly 6%. West Texas Intermediate crude futures rose 59 cents, or 1.1%, at $55.89 per barrel, after touching $56.36. They ended 2.6% lower in the previous session, and were headed for a weekly decline of more than 6%. Gold eased on Friday as investors booked profits after prices raced past $1,450 an ounce to hit a six-year peak, but Middle East tensions and prospects for lower interest rates kept bullion on track for a second week of gains. Spot gold shed 0.6% to $1,436.8, having touched its highest since early May 2013 at $1,452.60. However, U.S. gold futures hung on to gains, advancing by about 0.7% to $1,437.6.