(Bloomberg) — Stock futures advanced as solid results from megacaps Amazon.com Inc. and Apple Inc. tempered concern with data highlighting still uncomfortably high levels of inflation that should make the Federal Reserve keep its firm grip on monetary policy.
S&P 500 contracts pushed higher after briefly paring gains when economic figures showed showed US employment costs rose in the second quarter by more than forecast, while the personal consumption expenditures price index had the biggest annual advance in 40 years.
The US benchmark equity gauge headed toward its best month since November 2020. Treasury two-year yields, which are more sensitive to imminent Fed moves, halted a two-day plunge. The dollar was little changed.
Fed Bank of Atlanta President Raphael Bostic said the US economy was “a ways” from entering a recession and the central bank had further to go in raising interest rates to get inflation under control.
He’s the first central banker to speak publicly since the Fed delivered its most aggressive back-to-back hikes since the early 1980s to tackle rampant inflation.
Companies with strong balance sheets are back in favor as robust earnings from big tech reassure investors amid bets the Fed will soon be able to slow the pace of rate rate hikes.
“We believe companies with a strong balance sheet, strong cost controls, and that produce strong sales growth will do exceptionally well in this environment,” said Geir Lode, head of global equities at Federated Hermes, adding that the market will again favor growth over value stocks.
Corporate Highlights:
- Intel Corp., the biggest maker of computer processors, fell far short of analysts’ second-quarter sales and profit estimates and slashed forecasts for the year.
- Roku Inc., the maker of streaming-TV devices, said advertisers are pulling back on spending due to economic concerns.
- Exxon Mobil Corp.
and Chevron Corp. posted their highest-ever profits, reaping the rewards from surging commodity prices amid supply disruptions.
- Procter & Gamble Co.’s forecast for earnings and sales growth lagged analyst estimates and the company warned about another year of elevated costs.
Some of the main moves in markets:
Stocks
- Futures on the S&P 500 rose 0.5% as of 8:54 a.m.
New York time
- Futures on the Nasdaq 100 rose 0.8%
- Futures on the Dow Jones Industrial Average were little changed
- The Stoxx Europe 600 rose 1%
- The MSCI World index rose 0.2%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro fell 0.1% to $1.0186
- The British pound fell 0.5% to $1.2121
- The Japanese yen rose 0.2% to 133.98 per dollar
Bonds
- The yield on 10-year Treasuries advanced two basis points to 2.70%
- Germany’s 10-year yield advanced six basis points to 0.89%
- Britain’s 10-year yield advanced eight basis points to 1.94%
Commodities
- West Texas Intermediate crude rose 2.3% to $98.66 a barrel
- Gold futures rose 0.3% to $1,774.20 an ounce
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