Bullish outlooks for Tesla and United Airlines, as well as a modest pullback in Treasury bond yields, are giving U.S. stocks an early boost Thursday.
U.S. equity futures powered higher Thursday, while Treasury bond yields eased and the dollar retreated against its global peers, as investors look to ride a better set of first quarter earnings into the session.
A weaker session overnight in China, however, as well as another leg higher in oil prices are keeping some markets in check, with the former’s ‘zero Covid’ policy set to hit second quarter GDP and cause further disruptions to global supply chains, according to IMF Managing Director Kristalina Georgieva.
The EU’s potential ban on Russia crude exports is also lifting global oil prices, as is the bigger-than-expected decline in U.S. domestic crude stocks reported yesterday by the Energy Department, even as traders discount near-term China demand.
WTI crude futures for June delivery were marked 71 cents higher in overnight trading to change hands at $102.90 per barrel, while Brent contracts for the same month added $1.18 to trade at $107.98 per barrel.
In the U.S., a first quarter earnings blowout from Tesla (TSLA) – Get Tesla Inc Report, as well as a robust near-term outlook from United Airlines (UAL) – Get United Airlines Holdings, Inc. Report after the close of trading on Wednesday is adding some heft to U.S. equity futures ahead of weekly jobless claims data at 8:30 am Eastern time.
A modest pullback in Treasury bond yields, a well, is adding further support, with benchmark 10-year note yields slipping to 2.87% in overnight trading after briefly testing the 3% mark for the first time since 2019 in the overnight session.
The dollar index, which tracks the greenback against a basket of its global peers, was marked 0.35% lower at 100.035 in early New York trading.
Investors will also track comments from Federal Reserve Chairman Jerome Powell, as well as ECB President Christine Largarde, both of whom will speak at the IMF’s springs meetings today in Washington.
In Europe, the region-wide Stoxx 600 added another 0.72% to yesterday’s earnings-driven gains, with bluechips Nestle and ABB posting stronger-than-expected first quarter updates and French President Emanuel Macron winning a televised debate with his rival, the far-right Marine Le Pen, ahead of this weekend’s second round elections.
Overnight in Asia, China stocks fell for a third consecutive session, pulling the region-wide MSCI ex-Japan index 0.33% lower into the close of trading,
On Wall Street, futures contacts tied to the Dow Jones Industrial Average indicating a solid 240 point opening bell gain while those linked the S&P 500 priced for a 36 point advance. Futures linked to the tech-focused Nasdaq are looking at a firmer 160 point opening bell gain.
Tesla shares surged 7.6% after the carmaker posted stronger-than-expected first quarter profits, record sales and bullish near-term outlook that defied Wall Street’s forecasts and powered-through surging input prices and supply chain chaos.
CEO Elon Musk indicated there was a “reasonable shot” for 2022 deliveries to rise 60% from last year, noting the ramp-up of production facilities in Berlin and Austin, following a surprisingly solid first quarter that saw automotive profit margins rise to 30%, record sales of $18.76 billion and a stronger-than-expected bottom line of $3.22 per share.
United Airlines soared shares soared 8.5% after the carrier forecast record second quarter revenues amid what CEO Scott Kirby called the strongest domestic travel boom in more than three decades.
AT&T Inc. (T) – Get AT&T Inc. Report gained 1.2% after posting stronger-than-expected first-quarter earnings in its maiden investor update following the spin-off of its media assets into Warner Bros. Discovery (WBD) – Get WARNER BROS. DISCOVERY, INC. Report, with revenues topping forecast thanks to solid gains for its wireless and broadband divisions.
Netflix (NFLX) – Get Netflix, Inc. Report shares, meanwhile, extended their two-day slump, following the stock’s biggest single-day decline in early two decades, after billionaire investors Bill Ackman dumped his short-lived stake in the online streaming group.
