Before the US stock market on January 20, the three major futures indexes collectively rose slightly. As of now, Dow futures are up 0.34%, S&P 500 futures are up 0.54%, and NASDAQ futures are up 0.87%.
Stock index futures edged higher, promising to erase investors' portfolios from previous losses caused by expectations of tighter monetary policy and the prospect of slower growth.
According to the Wall Street Journal, Kara Murphy, chief investment officer at Kestra Holdings, said:
I didn't see much in the market that shocked me. No one says to "run for the hills," but some say they will take risks and reconfigure them to other areas of the market.
That sparked volatile trading in major stock indexes. On Wednesday, the Nasdaq Composite closed more than 10 percent below its all-time high and was seen as in a "stock market correction" phase.
Tech stock earnings season kicks off The market focus shifts to corporate earnings
Faced with the prospect of multiple rate hikes, slowing economic growth and soaring inflation to decades highs, investors are beginning to reassess excess returns on growth stocks such as tech stocks. In recent trading days, investors have shifted money from fast-growing tech companies to sectors that are expected to perform better in the coming year, such as finance and energy.
Travelers and American Airlines Group will announce results before U.S. stocks open. After the close, Netflix will announce the results of the fourth quarter of last year, becoming one of the first tech giants to announce the fourth quarter earnings report.
Before the U.S. stock market opened, stocks of major U.S. technology and Internet companies were higher. Aluminum shares also rose in premarket trading after aluminum producers forecast rising demand and warned that any conflict between Russia and Ukraine could exacerbate existing supply constraints.
Investors dump government bonds in anticipation of rising interest rates, pushing up bond yields and putting pressure on tech companies' stocks in the process: the future earnings of these companies become less attractive than bonds with rising yields.
According to Bloomberg, Rebecca Felton, senior market strategist at RiverFront Investment Group, said the earnings season has underperformed and investors need to pay close attention to how businesses react to price and wage pressures:
We do think the stock market will continue to move higher even if the Fed changes its policy.
She added that corporate earnings are still likely to exceed expectations.
German 10-year yields turn negative
In the bond market, the benchmark 10-year Treasury yield edged up to 1.838 percent from 1.826 percent on Wednesday.
The benchmark German 10-year yield fell into negative territory and is now falling to -0.022%, while the previous day briefly turned positive for the first time since 2019.
Data on the number of people claiming unemployment benefits last week released by the U.S. Department of Labor just released showed that the number of first-time jobless claims in the United States in the week of January 15 was 286,000, far exceeding the expected 225,000 and the previous value was 230,000.
Meanwhile, at 10 a.m. ET on Thursday, U.S. existing home sales data for December was released, which is expected to slow but is still on track to hit its highest level since 2006.
Oil prices fell back from a 7-year high
In commodity markets, international oil benchmark Brent crude futures fell 0.35% to $88.13 a barrel, while WTI crude futures fell 0.42% to $85.44 a barrel.
Earlier, the possibility of supply disruptions in Russia and the Middle East led to a slight rebound in oil prices: Brent crude hit its highest level since October 2014 on Wednesday.
In European stocks, the European STOXX 600 index edged up 0.07%, after a 0.2% decline, while the STOXX 50 index rose 0.14%. The utilities sector rose as crude oil prices retreated from a 7-year high, with automakers and the energy sector falling.
Asian stocks rose and fell: Japan's Nikkei 225 closed up 1.1 percent; Hong Kong's Hang Seng Rose 3.4 percent, and China's Shanghai Composite Index edged down 0.1 percent.
This article is from Wall Street Insights, welcome to download the APP to see more