Stock futures advanced Wednesday morning as investors awaited the advance print on first-quarter U.S. gross domestic product and digested a slew of mixed corporate earnings results after market close.
Big tech stocks including Facebook, Amazon, Microsoft and Netflix led the broader market lower during Tuesday’s regular session. After the bell, however, shares of Google-parent company Alphabet (GOOG, GOOGL) rose after the internet search giant reported first-quarter sales that topped expectations, reflecting strong trends in the period before the coronavirus pandemic broadened out and dampened many of its customers’ advertising spending plans.
Other major companies’ results already reflected a sharper downturn. Starbucks (SBUX) reported a quarterly same-store sales decline that was worse than consensus analysts expected, and said the negative impact to current-quarter results in the U.S. would likely be “significantly greater” before moderating. Automaker Ford (F) posted automotive sales that dropped 16% in the first quarter over last year and said it expects to lose more than $5 billion in the second quarter, before interest and taxes.
Looking ahead to Wednesday, investors will be awaiting the government’s first print on first-quarter gross domestic product, which is expected to show U.S. economic activity contracted for the first time since 2014 in the first three months of the year. The report will capture the only early impacts of the coronavirus and ensuing business closures in the U.S., with many economists expecting the contraction to deepen in the second quarter.
Later Wednesday afternoon, the Federal Reserve will release its latest monetary policy decision. With the lower end of the Fed’s target range for benchmark interest rates already at zero, market participants will instead focus on the Fed’s remarks around its existing, extensive list of stimulus measures and whether this arsenal could be boosted further as the central bank assesses the path forward for the virus-stricken economy.
“The Fed’s unconventional policy measures have already eclipsed even those seen during the Global Financial Crisis, including open-ended asset purchases which have seen the Fed buy $1.2trn [trillion] of Treasury securities in only four weeks and the announcement of a host of new lending facilities aimed at households and non-financial businesses – initially worth up to $2.3trn,” Andrew Hunter, senior U.S. economist for Capital Economics, wrote in a note. “With the Fed repeatedly ruling out the use of negative interest rates, the fed funds target range will not be cut any further and we expect it to remain at the current near-zero level for the foreseeable future.”
7:46 a.m. ET: Boeing’s cash burn totals $4.3 billion in Q1 amid coronavirus, 737 Max woes
Boeing (BA) posted yet another steep quarterly loss on Wednesday, as the double-barrel blast from the coronavirus pandemic and its idled flagship plane forced the aerospace giant to burn through more than $4 billion in cash.
Quarterly revenue of $16.9 billion was just short of the $17.01 billion expected, according to Bloomberg-compiled data, while the company’s adjusted loss per share of $1.70 was slightly better than the $1.76 anticipated. Boeing’s operating cash flow was negative $4.3 billion and came as customers delayed new aircraft purchases, with air travel virtually flatlining amid the global coronavirus pandemic.
Boeing delivered only 50 planes in Q1, a 66% drop from 149 in the comparable year-ago quarter.
7:11 a.m. ET: Mortgage applications for home purchases rebounded last week
An index tracking mortgage applications to purchase homes recovered some recent losses last week, according to the Mortgage Bankers Association’s weekly applications survey for the week ended April 24.
The Purchase Index increased 12% on a seasonally adjusted basis from the prior week. However, over last year, the unadjusted Purchase Index was 20% lower than the same week one year ago, after purchases declined sharply in recent weeks as the coronavirus pandemic kept home-buyers on the sidelines.
The rise came as mortgage rates fell to a record low in MBA’s survey, with a 30-year fixed rate mortgage dropping to 3.43% from 3.45% last week.
“The news in this week’s release is that purchase applications, still recovering from a five-year low, increased 12% last week to the strongest level in almost a month,” Joel Kan, MBA’s associate vice president of economic and industry forecasting, said in a statement. “The 10 largest states had increases in purchase activity, which is potentially a sign of the start of an upturn in the pandemic-delayed spring home buying season, as coronavirus lockdown restrictions slowly ease in various markets.”
An index tracking refinances fell 7% over last week, but was still 218% higher than the same week in 2019. Combined with the purchases index, overall mortgage applications decreased 3.3% over last week.
7:06 a.m. ET Wednesday: Stock futures rise
Here were the main moves in markets, as of 7:06 a.m. ET:
S&P 500 futures (ES=F): up 20.5 points, or 0.71%, to 2,887.75
Dow futures (YM=F): up 144 points, or 0.6%, to 24,189.00
Nasdaq futures (NQ=F): up 85.25 points, or 0.98%, to 8,805.00
Crude (CL=F): +$1.64 (+13.29%) to $13.98 a barrel
Gold (GC=F): -$5.00 (-0.29%) to $1,717.20 per ounce
10-year Treasury (^TNX): -1.6 bps to yield 0.594%
6:03 p.m. ET Tuesday: Stock futures little changed Tuesday evening
Here were the main moves at the start of the overnight session for U.S. equity futures, as of 6:03 p.m. ET:
S&P 500 futures (ES=F): down 0.75 points, or 0.03%, to 2,866.5
Dow futures (YM=F): down 38 points, or 0.16%, to 24,007.00
Nasdaq futures (NQ=F): up 34.25 points, or 0.39%, to 8,754.00
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