Nasdaq Futures Fly As Meta Keeps Tech Earnings’ Buoyancy Intact: Will Apple, Amazon, Alphabet Toe In Line?

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The index futures point to a mixed opening on Thursday, as tech earnings continue to be encouraging. Meta Platform Inc’s (NASDAQ:META) strong earnings could set the tempo for the market mood as traders wait to hear from some of its big tech peers after the close.

Cues From Wednesday’s Trading:

Stocks closed higher on the Fed decision day on Wednesday, as an in-line rate move by the central bank and positive tech earnings news supported sentiment.

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The major averages opened modestly lower and moved sideways until the Fed rate announcement. With the Fed serving a 25 basis point hike, in line with expectations, but hinting at more rate hikes to come, stocks initially reacted negatively and slipped further immediately after the verdict was announced. Following Chair Jerome Powell’s presser, stocks launched into a rally in late afternoon trading.

The Nasdaq Composite Index rose to its highest level since Sept. 12 and the S&P 500 Index settled at its highest level since Aug. 25.

Technology, communication services and consumer discretionary stocks spearheaded Wednesday’s rally, while the energy sector served as a drag.

U.S. Indices’ Performance On Wednesday
Index Performance (+/-)   Value
Nasdaq Composite +2%   11,816.32
S&P 500 Index +1.05%   4,119.21
Dow Industrials +0.02%   34,092.96

Analyst Color:

At the press conference, Powell repeated Fed’s commitment toward implementing more rate hikes to rein in inflation but left open the possibility of the Fed either raising rates above or stopping below the peak fed funds rate implied by the dot plot curve released in December, said Comerica Bank chief economist Bill Adams.

The Fed’s latest dot-plot projections show rates peaking at 5-5.25%.

“Unlike 2022 Fed decisions, when Chair Powell’s comments caused expectations for rate hikes over the next few quarters to jump, financial markets are largely shrugging off Powell’s guidance, and continue to see the path of least resistance as a final 25 bps hike after today, probably in March, and the Fed more likely than not pivoting to interest rate cuts by the end of 2023,” Adams said.

The economist sees a 25 basis-point rate hike at the March meeting and a 25 basis-point cut each in September and December, leaving the fed funds rate at the level where it was at the beginning of 2023.

Futures Today:

U.S. Futures’ Performance On Thursday
Index Performance (+/-)  
Nasdaq 100 Futures +1.31%  
S&P 500 Futures +0.47%  
Dow Futures -0.16%  
R2K Futures -0.14%  

In premarket trading on Thursday, the SPDR S&P 500 ETF Trust (NYSE:SPY) rose 0.49%, to $412.83, and the Invesco QQQ Trust (NASDAQ:QQQ) rallied 1.39%, to $305.11, according to Benzinga Pro data.

Upcoming Economic Data:

The Labor Department is scheduled to release its weekly jobless claims report at 8:30 a.m. EST. Economists, on average, expect the number of individuals claiming unemployment benefits to be 200,000 in the week ended Jan. 28 compared to 186,000 the previous week.

At 10 a.m. EST, the Commerce Department is due to release its factory orders report for December. The consensus calls for a 2.3% month-over-month increase in factory orders, reversing some of the 1.8% drop in November.

The Treasury will auction 4-week and 8-week Treasury notes at 11 a.m. EST.

Stocks In Focus:

  • Carvana Company (NYSE:CVNA) was extending its recent run and traded up about 19.5% in premarket trading.
  • Meta soared about 19% following its better-than-expected fourth-quarter revenue and the management commentary on pursuing financial discipline.
  • Other stocks moving higher on earnings include Align Technology Inc. (NASDAQ:ALGN) and e.l.f. Beauty Inc. (NYSE:ELF).
  • ConocoPhillips (NYSE:COP), Cardinal Health Inc. (NYSE:CAH), Alibaba Group Holding Limited (NYSE:BABA), Bristol-Myers Squibb Co. (NYSE:BMY), Merck & Co. Inc. (NYSE:MRK) and Eli Lilly & Co. (NYSE:LLY) are among the notable companies reporting ahead of the market open.
  • Noteworthy names due to release quarterly results after the close include Apple Inc. (NASDAQ:AAPL), Amazon Inc. (NASDAQ:AMZN), Qualcomm Inc. (NASDAQ:QCOM), Ford Motor Company (NYSE:F) and Beazer Homes USA Inc. (NYSE:BZH), Gilead Inc. (NASDAQ:GILD).

Commodities, Bonds, Other Global Equity Markets:

Crude oil futures, which fell close to 3% on Wednesday, were seeing a slight upward bounce on Thursday. The WTI-grade crude oil traded at around $76.60. The 10-year U.S. Treasury was up slightly at 3.413% after dipping below the 3.5% mark on Wednesday amid a batch of economic data and the Fed decision.

The Asia-Pacific markets, with the exception of Hong Kong and Singapore, closed higher, although the sentiment was not so positive as seen on Wall Street overnight. The Chinese market ended mixed.

European stocks were notably higher in late-morning trading ahead of two key central bank decisions from the region. The Bank of England and the European Central Bank are set to announce their monetary policy decisions at 7 a.m. EST and 8:15 a.m. EST, respectively. The former is expected to raise by 50 basis points to 4% and the latter will also likely announce a hike of a similar magnitude to 3%.

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