US equity futures rose in choppy trading as JPMorgan Chase & Co. kicked off key earnings reports from big Wall Street banks. Bonds advanced, led by UK gilts which benefited from reports the government was preparing to scrap parts of its controversial tax-cutting plans.
(Bloomberg) — US equity futures rose in choppy trading as JPMorgan Chase & Co.
kicked off key earnings reports from big Wall Street banks. Bonds advanced, led by UK gilts which benefited from reports the government was preparing to scrap parts of its controversial tax-cutting plans.
Contracts on the S&P 500 and Nasdaq 100 erased earlier losses as corporate results started rolling in.
JPMorgan shares rose about 2% in premarket trading after it beat Wall Street targets for earnings and revenue. Morgan Stanley shares dropped about 3% as equity trading revenue missed estimates.
US banks are expected to post the biggest profit decline of any S&P 500 Index sector, according to data compiled by Bloomberg Intelligence.
The fear is Fed tightening will spark defaults and force banks to set aside higher provisions against losses.
“Even though investors may look through a disappointing CPI print, it will be a much higher bar to look through weak corporate earnings.” Invesco global market strategist David Chao told clients.
“Growth is below trend and decelerating because the Fed is still tightening. This is a tough backdrop for risk assets.”
In Britain, government bonds rallied sharply as Prime Minister Liz Truss prepared to reverse parts of her tax-cutting program and ousted chancellor Kwasi Kwarteng.
The pound weakened.
Her plans have roiled UK markets for weeks, forcing the Bank of England to launch an emergency bond-buying program. That program expires later on Friday.
“It does seem pretty clear that the government is preparing a U-turn on at least a very big chunk, if not half, the permanent tax cuts in the budget,” BlackRock Inc.’s chief macroeconomic strategist, Rupert Harrison, told Bloomberg Television.
“And if we don’t get that, then the markets will react very negatively.”
A report showed US retail sales stagnated in September, suggesting inflation was starting to curb consumer purchases.
Excluding gasoline, retail sales were up 0.1% compared with a forecast for an advance of 0.2%.
Elsewhere, oil headed for weekly losses as signs of a global economic slowdown and tighter monetary policy threaten to sap energy consumption.
The International Energy Agency earlier warned crude production cuts agreed by OPEC+ group risked causing a price spike that tipped the global economy into recession.
Crypto assets gained, with Bitcoin touching a one-week high, within reach of surpassing the $20,000 level.
Some of the main moves in markets:
Stocks
- Futures on the S&P 500 rose 0.5% as of 8:48 a.m.
New York time
- Futures on the Nasdaq 100 rose 0.5%
- Futures on the Dow Jones Industrial Average rose 0.5%
- The Stoxx Europe 600 rose 1.5%
- The MSCI World index rose 0.6%
Currencies
- The Bloomberg Dollar Spot Index rose 0.3%
- The euro fell 0.4% to $0.9736
- The British pound fell 0.9% to $1.1229
- The Japanese yen fell 0.4% to 147.77 per dollar
Cryptocurrencies
- Bitcoin rose 2.1% to $19,789.9
- Ether rose 3.4% to $1,337.65
Bonds
- The yield on 10-year Treasuries declined eight basis points to 3.86%
- Germany’s 10-year yield declined 11 basis points to 2.18%
- Britain’s 10-year yield declined 18 basis points to 4.02%
Commodities
- West Texas Intermediate crude fell 2.1% to $87.26 a barrel
- Gold futures fell 1% to $1,659.70 an ounce
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