(Bloomberg) — U.S. equity-index futures rose Friday as Amazon.com Inc. earnings soothed nerves about the technology sector. European stocks opened higher, while a hawkish chorus from key central banks hurt bonds.
Contracts on the tech-heavy Nasdaq 100 were up 1.9% after e-commerce titan Amazon and Snap Inc.
soared in late trading on strong earnings. Europe’s Stoxx 600 headed for the first weekly gain this year. Oil was on course for a seventh weekly advance. The U.K.’s 10-year yield climbed to the highest level since November 2018.
The dollar stared at the worst week since 2020.
The relief for equity investors comes after a a historic, $251 billion wipeout for Facebook owner Meta Platforms Inc. on Thursday sparked a global technology rout and pulled down U.S.
indexes. Despite some weaker reports, the overall earnings picture in the world’s largest economy remains robust, providing investors a cushion against concerns ranging from Federal Reserve tightening to stubborn inflation.
Amazon could add nearly $200 billion in market value if the stock’s 14% gain in after-hours trading holds to Friday’s Wall Street close.
That is brightening the mood after Nasdaq 100’s worst drop since 2020.
Volatility has become the hallmark of global markets this year. Investors are trying to come to grips with less favorable monetary conditions and a moderating global recovery but hoping company earnings will underpin stocks.
“The first half this year we are now experiencing a rates shock,” Tracy Chen, portfolio manager at Brandywine Global Investment Management, said on Bloomberg Television.
“If the Fed and BOE and other EM central banks are too aggressive in hiking interest rates, potentially we are going to face kind of a recession risk in the second half, or at least more slowdown in the economy.”
Hawkish comments from European Central Bank President Christine Lagarde and a Bank of England interest-rate hike underlined risks from inflation.
Investors dumped the region’s bonds.
Investors also awaited Friday’s official jobs report, where they focused on wage growth to gauge the health of the economy and the potential for a further surge in inflation.
The looming jobs report “is a reminder that expectations for Fed policy are the key influence on this market right now,” wrote Tom Essaye, a former Merrill Lynch trader who founded The Sevens Report newsletter.
A hot inflation print next week would “rekindle hawkish Fed concerns,” he added.
Treasury yields were steady, with the 10-year rate hovering around 1.83%. The dollar was little changed, heading for a 1.4% decline this week.
An Asia-Pacific equity gauge pushed higher partly on a 3% jump in Hong Kong, which was catching up with global markets after reopening from a holiday.
The Stoxx 600 advanced 0.4%, with energy companies and banks leading the gains.
West Texas Intermediate hit a fresh seven-year high near $91 a barrel, set for a jump of 4.6% this week. Brent has surged 18% since the year began and banks including Goldman Sachs Group Inc.
forecast it’ll reach $100.
For more market analysis, read our MLIV blog.
What to watch this week:
- U.S. payrolls report for January, Friday
- Winter Olympics kick off in China, Russia’s President Vladimir Putin due to attend opening ceremony, Friday
Some of the main moves in markets:
Stocks
- The Stoxx Europe 600 rose 0.4% as of 8:16 a.m.
London time
- Futures on the S&P 500 rose 1.1%
- Futures on the Nasdaq 100 rose 1.9%
- Futures on the Dow Jones Industrial Average rose 0.6%
- The MSCI Asia Pacific Index rose 0.8%
- The MSCI Emerging Markets Index rose 1%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was unchanged at $1.1440
- The Japanese yen fell 0.1% to 115.11 per dollar
- The offshore yuan was little changed at 6.3584 per dollar
- The British pound fell 0.1% to $1.3583
Bonds
- The yield on 10-year Treasuries was little changed at 1.83%
- Germany’s 10-year yield advanced two basis points to 0.17%
- Britain’s 10-year yield advanced two basis points to 1.38%
Commodities
- Brent crude rose 0.7% to $91.73 a barrel
- Spot gold rose 0.2% to $1,808.89 an ounce
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