Opening Bell: U.S. Futures, Oil Bounce On China Data Trifecta; Qualcomm
Investing.com | Apr 17, 2019 09:12
- U.S. futures get a boost from China's triple data beats; STOXX 600 gaps down
- Yields on U.S. Treasurys, Chinese bonds surge as investors switch to risk assets
- Qualcomm (NASDAQ:QCOM) stock spikes on surprise settlement with Apple (NASDAQ:AAPL)
- Oil jumps above $64 on China optimism and inventory drop h2 Key Events/h2
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Canadian CPI and Core CPI for March are released Wednesday.
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Canadian Trade Balance, Exports and Imports for February are released Wednesday.
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Canadian Nonfarm Employment Change is released Thursday.
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Canadian Retail Sales and Core Retail Sales for February are released Thursday.
- Stock markets in countries including the U.S., U.K., Canada and Germany will be closed for Easter holidays on Friday.
- PEP ), scheduled to release earnings before market open today, is expected to post a $0.92 EPS and $12.67 billion revenue. The company hasn’t missed on earnings for at least 23 quarters, and on revenues for five quarters.
- Morgan Stanley (NYSE:MS) (NYSE:report results before market open. Analysts see $1.17 EPS and $9.91 billion revenue. The firm missed on both metrics last quarter.
- AXP ), scheduled to report earnings on Thursday, is expected to post an EPS of $1.99 and a revenue of $10.46 billion. While the charge-card provider hadn’t missed on earnings in nine quarters, it missed on revenues in the previous quarter.
- Alcoa (NYSE:AA) (NYSE:AA ) is scheduled to release corporate results after market close on Wednesday, with an EPS of $0.12 and a $2.82 billion revenue. It hasn’t missed an EPS expectation over four quarters or a revenue estimate over three.
- Honeywell (NYSE:HON) (NYSE:HON ) is also set to report on Thursday, with an EPS consensus of $1.83 EPS and $8.63 billion revenue. The group hasn't missed on either metric for the last eight quarters.
- Canada’s S&P/TSX Composite closed down 0.08 percent Tuesday.
- The MSCI All-Country World Index advanced less than 0.05%.
- The U.K.’s FTSE 100 Index dropped 0.3%.
- The MSCI Emerging Market Index gained 0.3% to the highest in 10 months.
- The Canadian loonie was up 0.47 percent against the U.S. greenback early Wednesday, trading at 0.7525.
- The Dollar Index dropped 0.21%.
- The euro gained 0.2% to $1.1309, the strongest in more than three weeks.
- The British pound climbed 0.1% to $1.3057.
- The Japanese yen rose less than 0.05% to 111.98 per dollar.
- Canada’s 10-year yield was up early Wednesday at 1.823, a 2.24-percent increase.
- The yield on 10-year Treasurys edged one basis point higher to 2.60%, the highest in more than four weeks.
- Germany’s 10-year yield rose two basis points to 0.09%.
- Britain’s 10-year yield ticked two basis points higher to 1.24%.
- Japan’s 10-year yield gained one basis point to -0.01%.
- West Texas Intermediate crude climbed 0.6% to $64.46 a barrel, the highest in a week.
- Gold advanced 0.1% to $1,278.31 an ounce, the first advance in a week.
- The Bloomberg Commodity Index climbed 0.3%.
European shares looked downbeat this morning while futures on the NASDAQ 100 pointed to a firmer open in the upcoming U.S. session, as investors tried to find a clearer path across multi-layered themes such as positive economic data from China and mixed corporate earnings results from the U.S.
The iron ore weighed on miners shares.
In the earlier Asian session, China’s retail sales all beating analysts' expectations.
While seeing the beneficial effects of the recent boost by Chinese policy makers to economic stimulus—with some domestic stocks also well positioned to benefit from renewed economic optimism—should help ease concerns about flagging global output, it also may have led investors to assume that additional pro-cyclical measures are unlikely.
China 10-Year Yields Daily Chart
In reaction to the news, the yield on China’s 10-year sovereign notes climbed to its highest level since November, crossing over the 200 DMA, after bottoming out earlier in the month.
Japan’s Nikkei 225 rose 0.25%.
h2 Global Financial Affairs/h2Yesterday’s U.S. session saw all four major indices cling onto green territory as some high-profile companies posted conflicting signals on earnings momentum as well as on the broader economic outlook.
The Utilities , which slid 1.24% as traders sought risk, all weighed down on the index, preventing a more meaningful advance.
posted slightly better-than-expected EPS ($0.7 vs $0.66) but missed revenue expectations ($23 billion vs $23.2). Trading revenue fell 13% but topped analysts’ estimates. The stock still managed to pare early losses, posting a 0.13% gain. However, it was the group's subdued forward outlook that weighed the most on sentiment, as it reminded investors of the gloomy soft-guidance tone that spread among corporate's executives last year on the backdrop of trade war jitters, rising interest rates and a strengthening dollar.
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Besides, we've recently discussed the fact that corporate profits are set to normalize and their net interest income is likely to grow at half the rate as last year—ironically just as the Fed halts its own path to normalization.
Overall, the SPX closed 0.81% below its Sept. 20 record close.
The will be closely watched next week as shareholders look for clues as to how the aftermath of the plane crashes has impacted earnings momentum and long-term growth.
The reached a settlement that will see Apple return to using Qualcomm's modem chips. The agreement also envisages a six-year patent license and a payment from Apple to Qualcomm. The latter stock gained a further 6.81% in after-trading.
Apple Daily Chart
Conversely, Apple dropped 0.26%. after market close. Technically, however, the stock may be setting itself up for a rally, as buyers absorb all the supply at these levels, developing a falling flag—bullish in its uptrend.
Netflix (NASDAQ:NFLX) (NASDAQ:beating forecasts both on EPS ($0.76 vs $0.57) and on revenue ($4.52 billion vs $4.5 billion). However, the price slipped 0.75% after-hours, after the company warned rising prices may slow down growth.
IBM (NYSE:IBM) (NYSE:came in below forecasts.
UST 10-Year Daily Chart
Yields on 10-year Treasurys climbed for a second day, overtaking the downtrend line since early November, approaching the 100 DMA and, above that, the bottom-side of a symmetrical triangle.
The dollar wiped out yesterday’s gains, but held above the lows of the congestion since April 9—the bottom of a falling flag, bullish after the jump since late March.
WTI Daily Chart
crude inventories
In other news, the Australian dollar received a boost from China's upbeat figures, crossing above the 200 DMA for the first time in 13 months.
h2 Up Ahead/h2Earnings
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