US stock futures fluctuate as bank earnings approach: Markets wrap

(Bloomberg) — US stock futures were volatile as JPMorgan Chase & Co released key earnings reports from major Wall Street banks. Advanced bonds, led by UK bonds that benefited from reports that the government was preparing to scrap parts of controversial tax cut plans.

Most Read From Bloomberg

Contracts in the S&P 500 and Nasdaq 100 flipped between losses and gains as corporate results began to emerge. Shares of JPMorgan rose in pre-market trading after beating Wall Street’s profit and revenue targets. Morgan Stanley shares fell about 3% as stock-trading returns missed estimates.

US banks are expected to post the largest drop in profits compared to the S&P 500, according to data compiled by Bloomberg Intelligence. It is feared that the Fed’s tightening could lead to defaults and force banks to make higher provisions against losses.

“Although investors may view a disappointing CPI reading, it would be a much higher bar to consider weak corporate earnings.” David Chow, Invesco’s global market analyst, told clients. “Growth is below trend and slowing as the Fed continues to tighten. This is a difficult backdrop for risky assets.”

In Britain, government bonds rose sharply as Prime Minister Liz Truss prepared to reverse parts of her tax-cutting program and ousted Chancellor Kwasi Quarting. Double the pound.

Her plans turbulent UK markets for weeks, forcing the Bank of England to launch an emergency bond-buying programme. This program ends later on Friday.

Robert Harrison, chief macroeconomic strategist at BlackRock, told Bloomberg Television. “And if we don’t get that, the markets will react very negatively.”

The story continues

Read more: Bank results to give clues to the following market movement: Monitor profits

Technology shares continued to weaken in pre-market trading, as Jefferies became the latest bank to highlight the impact of higher rates and US restrictions on shipments to China.

Elsewhere, oil is headed for weekly losses as signs of a global economic slowdown and monetary tightening threaten to undermine energy consumption. The International Energy Agency warned earlier that the crude production cuts agreed by the OPEC + group could cause higher prices that pushed the global economy into recession.

Crypto assets are gaining, with Bitcoin reaching a one-week high that could cross the $20,000 level.

Some of the main movements in the markets:

Stores

• S&P 500 futures were little changed as of 8:10 a.m. New York time

• Nasdaq 100 futures fell 0.1%

• Futures contracts on the Dow Jones Industrial Average changed little

• The Stoxx Europe 600 Index is up 1.2%

• The MSCI World Index rose 0.5%.

coins

• Bloomberg spot dollar index up 0.5%

• The euro fell 0.5% to $0.9723

• The British pound fell 1.1 percent to $1.1204

• The Japanese yen fell 0.4 percent to 147.77 per dollar

Cryptocurrency

• Bitcoin rose 1.4% to $1,649.02

• Ether rose 2.7 percent to $1,329.07

bonds

• The yield on the 10-year Treasury fell six basis points to 3.88%.

• Germany’s 10-year yield fell nine basis points to 2.20%.

• The yield on British 10-year bonds fell 21 basis points to 3.99%.

goods

• West Texas Intermediate crude fell 1.7 percent to $87.57 a barrel

• Gold futures fell 1% to $1,660.80 an ounce

Most Read From Bloomberg Businessweek

© Bloomberg LP 2022