(Bloomberg) — U.S. equity futures rose Friday as Amazon.com Inc. earnings soothed nerves about the technology sector, while a Hong Kong rally boosted Asian shares. A hawkish chorus from key central banks hurt bonds.
Contracts on the tech-heavy Nasdaq 100 were up about 2% after e-commerce titan Amazon and Snap Inc.
soared in late trading on strong earnings. 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.
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 brightened the mood after a historic, $251 billion wipeout for Facebook owner Meta Platforms Inc. on Thursday consigned the Nasdaq 100 to its worst drop since 2020.
Hawkish comments from European Central Bank President Christine Lagarde and a Bank of England interest-rate hike underlined risks from inflation.
Investors dumped bonds: Japan’s five-year sovereign yield increased to zero for the first time since 2016, after an increase in European yields and selling in Treasuries.
The euro strengthened and the dollar retreated.
West Texas Intermediate oil flirted with $91 a barrel in an ongoing rally.
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.”
The latest data showed U.S.
service-sector growth pulled back in January to the slowest pace in nearly a year. Meanwhile, U.S. initial jobless claims fell more than expected last week to 238,000 ahead of data on payrolls Friday.
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.
In Europe, a slew of U.K. Prime Minister Boris Johnson’s top aides quit, deepening the crisis engulfing his government.
The pound was steady. European equity contracts edged up.
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
- S&P 500 futures rose 1.2% as of 2:25 p.m.
in Tokyo. The S&P 500 fell 2.4%
- Nasdaq 100 futures rose 2.1%. The Nasdaq 100 fell 4.2%
- Japan’s Topix index rose 0.6%
- Australia’s S&P/ASX 200 index increased 0.6%
- South Korea’s Kospi index climbed 1.4%
- Hong Kong’s Hang Seng index rose 3.1%
- Euro Stoxx 50 futures rose 0.3%
Currencies
- The Bloomberg Dollar Spot Index fell 0.2%
- The euro was at $1.1468, up 0.2%
- The Japanese yen was at 114.89 per dollar
- The offshore yuan was at 6.3495 per dollar
Bonds
- The yield on 10-year Treasuries advanced one basis point to 1.85%
- Australia’s 10-year bond yield rose 10 basis points to 1.97%
Commodities
- West Texas Intermediate crude was at $90.92 a barrel, up 0.7%
- Gold was at $1,807.30 an ounce, up 0.1%
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