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12th May 2022

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NEW YORK, NEW YORK - APRIL 15: People walk by the New York Stock Exchange on April 15, 2021 in New York City. After major companies reported strong earnings and new economic data points to a rebound in consumer spending, U.S. stocks climbed to record levels on Thursday. (Photo by Spencer Platt/Getty Images)

Stock futures opened slightly higher Wednesday evening as investors considered a batch of stronger-than-expected earnings results from major technology companies and a Federal Reserve decision that suggested the central bank would remain on hold with current policies.

Contracts on the S&P 500 edged higher, after the index touched a record intraday high and then closed in the red by the end of the regular trading day. Traders looked ahead to President Joe Biden’s address to Congress late Tuesday, which will serve as the forum for him to unveil an expected $1.8 trillion package aimed at supporting children, students and families, and which will likely be funded in part through some tax increases. 

Investors are also set to eye a bevy of key economic data reports on Thursday, with the first print on first-quarter gross domestic product and the latest weekly jobless claims report on deck, with the latter likely to show new claims improved to a fresh pandemic-era low. 

Earnings season has also continued to chug along. Shares of Apple (AAPL) gained in late trading after the company posted fiscal second-quarter results that easily exceeded expectations, with sales coming in better-than-expected across the Mac, iPad and especially the iPhone in the months following the launch of the 5G-enabled iPhone 12. Facebook (FB) shares also advanced after quarterly results showed a jump in both users and sales, with customers’ advertising spending accelerating as the pandemic abates. 

The strong results from the mega-cap tech names adds to a parade of companies that have so far exceeded expectations this earnings season, with a pick-up in economic activity and consumer confidence driving a surge in corporate profits over the doldrums of last year. As of early Wednesday, companies comprising nearly half of the S&P 500’s market capitalization had reported earnings results, with 83% of these corporations topping estimates, and by an average of 21.7%. Companies including Amazon (AMZN) are poised to report results on Thursday.

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Traders also considered the Federal Reserve’s latest monetary policy statement, which included no changes to policies but did highlight the recent improvements in U.S. economic conditions. In his press conference Wednesday afternoon, Fed Chair Jerome Powell doubled down on his messaging that the Federal Reserve was looking for substantial further progress toward its goals of maximum employment and price stability in the coming months, with these criteria needing to be met by actual economic results rather than mere projections for further improvement. 

“With no meaningful change to monetary policy or communication, this meeting was simply a message to market participants to sit back and observe as the economic recovery continues to unfold,” Charlie Ripley, senior investment strategist for Allianz Investment Management, said in an email Wednesday. “The Fed did acknowledge the pick-up in the pace of the economic recovery but came short of signaling any changes to policy at this stage in the cycle. It is difficult to argue the Fed’s position on inflation given the amount of slack that still exists in the labor market. However, if the recovery continues to gain strength, we expect the Fed will need to move away from peak policy accommodation.”

6:05 p.m. ET Wednesday: Stock futures drift higher after Apple, Facebook earnings top estimates 

Here’s where markets were trading Wednesday evening: 

  • S&P 500 futures (ES=F): 4,184.50, up 8.25 points or 0.2%

  • Dow futures (YM=F): 33,725.00, up 1 points or roughly unchanged

  • Nasdaq futures (NQ=F): 13,960.25, up 68 points or 0.49%

NEW YORK, NEW YORK – APRIL 15: People walk by the New York Stock Exchange on April 15, 2021 in New York City. After major companies reported strong earnings and new economic data points to a rebound in consumer spending, U.S. stocks climbed to record levels on Thursday. (Photo by Spencer Platt/Getty Images)

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

Read more from Emily:

2021-04-28 22:17:27


finance.yahoo.com


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