US equity futures fluctuated and stocks rose as investors weighed earnings reports and awaited commentary due later from Federal Reserve Chair Jerome Powell.
(Bloomberg) — US equity futures fluctuated and stocks rose as investors weighed earnings reports and awaited commentary due later from Federal Reserve Chair Jerome Powell.
Futures on the S&P 500 were little changed, while those on the Nasdaq 100 contracts edged higher. Pinterest Inc. fell in premarket trading after posting weaker-than-forecast revenue. Activision Blizzard Inc. rose as the video-game publisher’s results beat estimates. Baidu Inc. surged after affirming it will launch a ChatGPT-like bot in March.
Energy shares led gains in Europe after oil major BP Plc boosted shareholder returns and reported record profit. A gauge of Asian shares also gained.
Investors are assessing whether Powell will dampen market optimism over interest-rate cuts later in 2023, following January’s strong payrolls report and comments from other Fed officials about the possibility of a higher peak than policy makers had previously expected. Treasuries steadied after a two-day rout sparked by traders ramping up bets on future Fed tightening.
“I expect that Powell will drive home that point that they’ve done a lot and there’ll be a tightening that is going to impact the economy later on this year,” Jack McIntyre, a portfolio manager at Brandywine Global Investment Management LLC, said on Bloomberg Television.
Meanwhile, bearish bets are piling up for the tech-heavy Nasdaq 100, signaling its outperformance isn’t expected to last, according to Citigroup Inc. strategists led by Chris Montagu.
Geopolitical concerns are also back on the radar. As the US attempts to recover the sunken remains of a huge Chinese balloon it blasted out of the sky with a missile, Beijing acknowledged ownership of a second balloon spotted drifting over several Latin American countries.
US President Joe Biden will speak to a joint session of Congress on Tuesday evening against the backdrop of renewed tensions with China and a brewing showdown with House Republicans over raising the federal debt ceiling.
In Asia, shares of the Adani group climbed, trimming a rout that had wiped out more than $100 billion in market value, as the conglomerate’s founders prepaid some debt and traders covered short positions.
Turkish assets extended declines as the country continued to grapple with earthquakes that killed at least 4,000 people in Turkey and Syria.
Elsewhere, oil rose for a second session after Saudi Arabia unexpectedly raised its crude prices to Asia, signaling confidence in the demand outlook.
The yen gained after Japan’s wage data stoked bets the central bank will adjust or back away from its stimulus program under a new governor.
Key events:
- US trade, Tuesday
- Fed Chair Jerome Powell interviewed by David Rubinstein at the Economic Club of Washington, Tuesday
- President Joe Biden delivers the State of the Union address before Congress, Tuesday
- US wholesale inventories, Wednesday
- New York Fed President John Williams is interviewed at Wall Street Journal live event, Wednesday
- US initial jobless claims, Thursday
- ECB President Christine Lagarde participates in EU leaders summit, Thursday
- Bank of England Governor Andrew Bailey appears before Treasury Committee, Thursday
- US University of Michigan consumer sentiment, Friday
- Fed’s Christopher Waller and Patrick Harker speak, Friday
Some of the main moves in markets:
Stocks
- S&P 500 futures rose 0.1% as of 7:32 a.m. New York time
- Nasdaq 100 futures rose 0.3%
- Futures on the Dow Jones Industrial Average were little changed
- The Stoxx Europe 600 rose 0.2%
- The MSCI World index was little changed
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro fell 0.2% to $1.0707
- The British pound fell 0.2% to $1.1993
- The Japanese yen rose 0.5% to 132.04 per dollar
Cryptocurrencies
- Bitcoin rose 0.3% to $22,990.53
- Ether rose 0.2% to $1,641.66
Bonds
- The yield on 10-year Treasuries declined one basis point to 3.63%
- Germany’s 10-year yield advanced two basis points to 2.32%
- Britain’s 10-year yield advanced four basis points to 3.29%
Commodities
- West Texas Intermediate crude rose 1.5% to $75.24 a barrel
- Gold futures rose 0.3% to $1,884.20 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Jason Scott, Matthew Burgess, Tony Jordan, Tassia Sipahutar and Michael Msika.
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