US Stocks Eye Higher Open As Meta Q1 Uplifts Tech Sector: Analyst Says 'No Earnings Recession In Cards Yet'

Tech earnings could come to the market’s rescue on Thursday, with all major index futures currently trading higher. Traders could also weigh in on the first-quarter GDP report to take stock of how the economy fared amid a housing market downturn, banking crisis, and rising rate environment.

Cues From Wednesday’s Trading:

Stocks ended a volatile session on Wednesday on a mixed note, as economic and banking worries overrode optimism triggered by earnings reports from Microsoft Corp. MSFT.

The tech-heavy Nasdaq Composite, despite giving back most of its early gain in the afternoon, ended moderately higher for the session. The S&P 500 Index and the Dow Industrials pulled back below the unchanged in the afternoon and finished lower.

Following Wednesday’s pullback, the broader S&P 500 Index and the Dow Industrials were at fresh one-month lows.

Utility, energy, healthcare, industrial, material and financial stocks came under strong selling pressure, while gain by technology stocks helped mitigate some of the weakness.

Analyst Color:

Despite worries concerning a potential recession, companies have shown profit growth. “The most important consideration is that while recession fears are still very much discussed, there is no earnings recession in the cards yet,” said fund manager Louis Navellier.

He also noted that food companies are raising prices, which could turn out to be negative for inflation expectations. The stalemate over raising the debt ceiling also kept traders on the sidelines, he noted. Since then, the House has passed a bill to raise the ceiling but it remains to be seen whether President Joe Biden will ratify it, given his disagreement over the spending cuts that were included as part of the bill.

Futures Today

In premarket trading on Thursday, the SPDR S&P 500 ETF Trust SPY rose 0.58% to $406.72 and the Invesco QQQ Trust QQQ surged up 0.88% to $314.62, according to Benzinga Pro data.

Upcoming Economic Data:

The Labor Department is scheduled to release the weekly jobless claims report at 8:30 a.m. EDT. Economists expect the number of individuals claiming unemployment benefits to edge up from 245,000 in the week ended April 15 to 248,000 in the week ended April 22.

The Bureau Of Economic Analysis will release the advance first-quarter GDP report at 8:30 a.m. EDT. The consensus expectation calls for a slowdown in the year-over-year pace of GDP growth from 2.6% in the fourth quarter to 2%. The price consumption expenditure component of the report will also evince some interest.

The National Association Of Home Builders is due to release the pending home sales index for March. at 10 a.m. EDT. The index may have risen 0.5% month-over-month, slower than the 0.8% increase in February.

The Kansas City Federal Reserve’s manufacturing and composite purchasing managers’ indices for April are due at 11 a.m. EDT.

The Treasury will auction 8- and 4-week bills at 11:30 a.m. EDT. And 7-year notes at 1 p.m. EDT.

See also: Futures Trading: Best Futures To Trade

Stocks In Focus:

• Meta Platforms, Inc. META soared over 11% in premarket trading on its better-than-expected results.
• eBay, Inc. EBAY and Roku, Inc. ROKU also climbed in reaction to their earnings.
• Vornado Realty Trust VNO slumped over 15% after the company said it is deferring the payment of common stock dividends until the year-end.
• Wolfspeed, Inc. WOLF tumbled over 15% following its first-quarter earnings announcement.
• AbbVie, Inc. ABBV, American Airlines Group, Inc. AAL, Bristol-Myers Squib Co. BMY, Caterpillar, Inc. CAT, Comcast Corp. CMCSA, Eli Lilly & Co. LLY, Hasbro, Inc. HAS, Merck & Co., Inc. MRK, Mastercard, Inc. MA, Sanofi SNY and Southwest Airlines Co. LUV are the key companies reporting ahead of the market open.
• Amazon, Inc. AMZN, Amgen, Inc. AMGN, Beazer Homes USA, Inc. BZH, Capital One Financial Corp. COF, First Solar, Inc. (NASDAQ FSLR), Intel Corp. INTC, Snap, Inc. SNAP and Pinterest, Inc. PINS are among the companies reporting after the market close.

Canadian-Pacific Kansas City Limited CP, KLA Corp. KLAC, Mattel, Inc. MAT, eBay, Inc. EBAY, Meta Platforms, Inc. META and Roku, Inc. ROKU are among the companies reporting after the market close.

Commodities, Bonds, Other Global Equity Markets:

Crude oil futures snapped a two-session losing streak and traded modestly higher in early European session on Thursday and the yield on the benchmark 10-year U.S. Treasury note rose 0.028 percentage points to 3.458%.

The Asian markets ended Thursday’s session mostly higher, although the sentiment remained one of caution. The Chinese market led the gains in the region, while the Australian, and New Zealand markets, which remained closed on Wednesday, moved to the downside. The Singaporean market also ended lower for the session. European stocks showed tentativeness in late-morning deals.

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