June 22, 2024
Finance

US Futures Get Amazon, Meta Boost Before Jobs Data: Markets Wrap


(Bloomberg) — US stocks were poised to rally Friday after tech megacaps Meta Platforms Inc. and Amazon.com Inc. posted blowout earnings and as investors awaited a jobs report expected to support the case for interest-rate cuts.

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S&P 500 futures rose 0.6% and tech-heavy Nasdaq 100 contracts climbed 1% after the indexes advanced by more than 1% Thursday. Meta soared 17% in premarket trading and Amazon rallied 7.1% after the tech behemoths smashed quarterly profit expectations. The pair’s results boosted social media and e-commerce peers, with Snap Inc. up 6.8% and Shopify Inc. rising 4.8%. Apple Inc. slipped after its earnings showed weakness in China.

Big Oil added to the earnings buzz Friday, with Chevron Corp. and Exxon Mobil Corp. shares rising after both beat profit expectations.

Investors will parse monthly US jobs figures due later for confirmation of further cooling in the labor market that might encourage policy easing by the Federal Reserve. After figures out Thursday showed rising jobless claims, Friday’s print is expected to show employers added workers at a slower pace in January. Bloomberg economists see the unemployment rate edging up to 3.8%, from 3.7% in December.

“Any move closer to 4% could see markets changing bets on when Fed cuts could begin,” economists at Rand Merchant Bank in Johannesburg said in a note to clients.

In Europe, the Stoxx 600 index was also buoyed by positive earnings news, with Mercedes-Benz Group AG shares rising as much as 3.3% and Danske Bank A/S climbing 6.7%. The picture was more mixed in Asia, where key Chinese benchmarks pared steep declines in a session marked by wild swings. A broader gauge of the region’s stocks climbed 0.7%.

The dollar edged lower, set for a weekly decline. Treasuries were steady after their advance Thursday that was spurred by traders pricing in a faster pace of Fed rate cuts in the wake of renewed concerns around the health of US regional banks.

Investors will continue to closely track developments around these smaller lenders, as an index for the sector heads for its worst week since the fallout from the banking crisis last May. New York Community Bancorp has plunged 45% since shocking investors Wednesday by reducing its dividend, posting a quarterly loss and ramping up loan-loss provisions for exposure to commercial real estate.

Meanwhile, as investors rush into technology stocks, Bank of America Corp. strategists said they see similarities with the bubble of 1999, with markets assuming that the economy will perform strongly, despite tighter monetary policy.

While falling yields were pushing the Nasdaq higher in the fourth quarter, the script has now flipped to both rising over the past four weeks. This price action would typically only occur after a recession, such as in 2009 or the dot-com bubble around the turn of the century, BofA strategists led by Michael Hartnett wrote on a note.

Hartnett’s view on the rising dominance of tech stocks resembles a warning by JPMorgan Chase & Co. strategists earlier this week that the US equity market is increasingly drawing similarities with the dot-com bubble.

Elsewhere, oil headed for the biggest weekly loss since early November as negotiations advance for an agreement to pause the Israel-Hamas war in what could be a crucial step toward ending the conflict. Gold headed for its largest weekly increase since the start of December as lower Treasury yields offered support for the metal, amid the concerns over US regional banks.

Some of the main moves in markets:

Stocks

  • S&P 500 futures rose 0.6% as of 6:44 a.m. New York time

  • Nasdaq 100 futures rose 1%

  • Futures on the Dow Jones Industrial Average were little changed

  • The Stoxx Europe 600 rose 0.7%

  • The MSCI World index rose 0.3%

Currencies

  • The Bloomberg Dollar Spot Index fell 0.1%

  • The euro rose 0.1% to $1.0883

  • The British pound rose 0.1% to $1.2761

  • The Japanese yen was little changed at 146.48 per dollar

Cryptocurrencies

  • Bitcoin rose 0.2% to $43,149.94

  • Ether rose 0.5% to $2,316.05

Bonds

  • The yield on 10-year Treasuries was little changed at 3.88%

  • Germany’s 10-year yield was little changed at 2.16%

  • Britain’s 10-year yield advanced five basis points to 3.80%

Commodities

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Richard Henderson and Chiranjivi Chakraborty.

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©2024 Bloomberg L.P.



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