Thursday April 29th

29-04-2021

Stock futures rise after better-than-expected Big Tech earnings, Facebook and Apple shares jump

U.S. stock index futures rose on Thursday after blowout earnings results from two of the biggest tech companies: Apple and Facebook. Futures contracts tied to the Dow Jones Industrial Average gained 165 points. S&P 500 futures rose 0.7%, with the benchmark poised to set another record. Nasdaq 100 futures gained 1.1%. Investors pointed to strong earnings results from both iPhone maker Apple and social media platform Facebook in explaining Thursday’s gains. Apple said that sales jumped 54% during the quarter, with each product category seeing double-digit growth. The company also said it would increase its dividend by 7%, and authorized $90 billion in share buybacks. Apple shares were up nearly 3% in early trading. Facebook’s revenue jumped 48%, driven by higher-priced ads. Facebook surged more than 7% in the premarket. Qualcomm shares soared 5% in early trading after reporting a 52% jump in revenue. Cruise stocks jumped after the CDC said sailings from U.S. ports could begin mid-July. Carnival and Norwegian shares jumped more than 2% in premarket trading. “The primary market trend remains positive,” said Keith Lerner, chief market strategist at Truist. “But we expect a choppier environment as tensions are set to persist between better economic growth and earnings prospects versus the potential for higher taxes and rising interest rates as the economy normalizes,” he added. Thursday marks President Joe Biden’s 100th day in office. On Wednesday evening, he made his first address to a joint session of Congress where he pushed his so-far popular agenda, which includes a $2 trillion infrastructure plan as well as a freshly unveiled, $1.8 trillion plan for families, children and students. Thursday is also the busiest day of the quarterly earnings season, with roughly 11% of the S&P 500 slated to provide quarterly updates. McDonald’s published its results before the opening bell and told investors that its sales have finally topped pre-pandemic levels. The Dow component also raised its outlook for systemwide sales growth. Caterpillar beat expectations and traded higher, while Merck was trading lower following disappointing results. Amazon, Gilead Sciences, Twitter, U.S. Steel and Western Digital will post results after the market closes. Economic data released Thursday gave investors an update on the progress of the economic recovery. First-quarter GDP hit an annualized rate of 6.4%, according to a report published by the Bureau of Economic Analysis, a sign that the U.S. economy began 2021 with an acceleration of commercial activity. Outside of the reopening-fueled third-quarter surge last year, it was the best period for GDP since the third quarter of 2003. The Labor Department, meanwhile, reported that initial jobless claims last week totaled 553,000, just above the 528,000 estimate issued by Dow Jones. The Federal Reserve said Wednesday that it would hold interest rates near zero. The S&P slid from its high after Federal Reserve Chairman Jerome Powell said during a press conference following the Federal Open Market Committee’s decision that there are some signs of froth in the market. “Rates remain unchanged for now and, despite improving economic data, taper talk remained off the table at today’s Federal Reserve meeting,” said Bethany Payne, portfolio manager at Janus Henderson. “As vaccination rates accelerate, employment strengthens, and expansive fiscal policy adds further support to household and business incomes, investors are now looking for signs of whether the central bank safety net could be withdrawn sooner than expected,” she added. Stocks in Asia-Pacific mostly rose on Thursday, as investors reacted to the U.S. Federal Reserve’s decision to keep its easy money policy in place. Mainland Chinese stocks were higher on the day, with the Shanghai composite up 0.52% to 3,474.90 and the Shenzhen component advancing 0.456% to 14,464.08. Hong Kong’s Hang Seng index rose about 0.7%, as of its final hour of trading. South Korea’s Kospi bucked the overall trend as it slipped 0.23% to close at 3,174.07. Markets in Japan were closed on Thursday for a holiday. Oil prices extended gains on Thursday after rising 1% the previous session, as bullish forecasts of recovering demand outweighed concerns about the impact of rising COVID-19 cases in Brazil, India and Japan. Brent rose 49 cents, or 0.7%, to $67.76 a barrel, and U.S. West Texas Intermediate crude was up 43 cents, or 0.7%, at $64.29 a barrel. This is the third consecutive day that the both contracts are rising. Gold fell on Thursday, giving up early gains as U.S. Treasury yields rose and the dollar firmed, while investors awaited U.S. economic data after the Federal Reserve said it was too early to consider rolling back its support measures. Spot gold edged 0.3% lower to $1,777 per ounce. U.S. gold futures rose 0.1% to $1,776.50 per ounce.