Nasdaq futures jump as tech earnings soothe nerves: markets wrap

US equity futures rose Thursday after upbeat earnings bolstered the bull case for the economy and markets, dispelling growth fears for now.

Contracts on the technology-heavy Nasdaq 100 jumped around 2%, paced by gains in Meta Platforms Inc. after Facebook’s main social network added more users than projected. In the premarket, PayPal Holdings Inc. shares rose on reported better-than-expected first-quarter revenue while Qualcomm Inc. led US chip stocks higher. S&P 500 futures surged more than 1% and the Stoxx Europe 600 Index added 0.9%.

Thursday’s relief rally punctuates a week of nerves marked by China’s struggle to suppress Covid, Russia’s war in Ukraine and worries that Federal Reserve monetary tightening may tip the US economy into a recession.

“Ironically the better the corporate earnings backdrop, the less recession risk there is, so the Fed can increase rates more aggressively and all the implications that will have on valuations,” said Roger Lee, a strategist at Investec. “Paradoxically good corporate news could ultimately be bad news for the market.”

Almost 70 companies in Europe are due to publish results Thursday. About 61% of the companies that have reported so far have beaten estimates, according to Sanford C. Bernstein.

In currency markets, a falling yen spurred wider swings on the Bank of Japan’s decisions to double down on dovish yield curve control through fixed-rate bond buying every business day. The currency’s plunge to a 20-year low threatens to leave it significantly weaker for years to come, shaking up global money flows and undermining Japan’s stimulus efforts.

The Japanese currency slid to the closely watched level of 130 per dollar while the US currency extended an advance, the offshore yuan sank and the euro retreated along with the pound.

Treasuries clung to a small gain, with the 10-year benchmark yield down three base points to trade around 2.8%.

Oil edged higher with West Texas Intermediate futures around $ 102 a barrel. Crude prices have struggled for direction this week as China’s spreading virus outbreak continued to weigh on the outlook for global demand.

Natural gas prices in Europe declined following two days of gains as buyers considered options to keep getting supply from Russia without violating sanctions.

European Union members pushed the bloc to deliver clearer guidance over Russia’s demand for natural gas payments to be made in rubles after Moscow cut off supply to Poland and Bulgaria. Germany signaled it’s open to a phased-in ban on Russian oil imports.

Events to watch this week:

  • Tech earnings include Amazon, Apple
  • EIA oil inventory report, Wednesday
  • US 1Q GDP, weekly jobless claims, Thursday
  • ECB publishes its economic bulletin, Thursday

Some of the main moves in markets:

Stocks

  • Futures on the S&P 500 rose 1.5% as of 6:41 am New York time
  • Futures on the Nasdaq 100 rose 2%
  • Futures on the Dow Jones Industrial Average rose 0.9%
  • The Stoxx Europe 600 rose 0.9%
  • The MSCI World index rose 0.3%

Currencies

  • The Bloomberg Dollar Spot Index rose 0.6%
  • The euro fell 0.5% to $ 1.0507
  • The British pound fell 0.5% to $ 1.2482
  • The Japanese yen fell 1.5% to 130.38 per dollar

Bonds

  • The yield on 10-year Treasuries declined three basis points to 2.81%
  • Germany’s 10-year yield was little changed at 0.81%
  • Britain’s 10-year yield was little changed at 1.82%

Commodities

  • West Texas Intermediate crude rose 0.4% to $ 102.39 a barrel
  • Gold futures were little changed

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