Friday October 22nd

22-10-2021

S&P 500 futures hover near record, Nasdaq futures fall after disappointing tech earnings

U.S. stock index futures were about unchanged a day after the benchmark closed at a record. S&P 500 futures were flat while Dow Jones Industrial Average futures gained 46 points. Futures on the Nasdaq-100 shed 0.2% however, after poor results from two technology companies. Shares of Intel retreated more than 9% in premarket trading following a weaker-than-expected sales report. The semiconductor company blamed an industry-wide chip shortage for its revenue miss. Social media stocks also dropped in extended trading after Snap said its advertising business declined due to Apple’s privacy changes. Snap shares sunk more than 20% in premarket trading. Facebook and Twitter each pulled back more than 3% after hours. Despite these blips in the tech sector, overall earnings season has been terrific so far, boosting the broader market back to an all-time high following a two-month lull. So far for the third quarter earnings season, 84% of companies are reporting EPS above estimates, according to Refinitiv. Profits are on pace in the quarter to increase 33.7%, according to Refinitiv. In Thursday’s regular session, the S&P 500 notched both a fresh intraday high and new record close. The broad index rose 0.3% for its seventh consecutive positive session. The Nasdaq Composite rose 0.6%, while the Dow shed 6.26 points, or 0.02%. All three major averages are on track to close the week higher for three-straight weeks of gains. The Dow touched an intraday record earlier in the week. On the month, all three indexes are up at least 5%. Tesla shares closed 3% higher Thursday after posting record profit and revenue, along with strong margins. “In a quarter where we thought things would slow down and there was concern about what profit margins were going to look like, these companies are still doing well,” said Victoria Fernandez, chief market strategist at Crossmark Global Investments. Strong jobs data also added to the positive market sentiment on Thursday. Initial jobless claims fell to a new pandemic low of 290,000 last week, the Labor Department reported Thursday — down 6,000 from the previous week and lower than the 300,000 expected from economists surveyed by Dow Jones. One of investors’ fears during the market’s recent struggles was a China property crisis. However, investors got good news on that front overnight with China’s Evergrande reportedly paying a key interest payment that was due to foreign bondholders, staving off a default for the property developer. Asia-Pacific markets were mixed on Friday, as shares of China Evergrande Group surged in Hong Kong following media reports that the embattled developer is set to pay off a coupon payment on a dollar-denominated bond. The broader Hang Seng index in the city rose 0.42% on the day to 26,126.93. Mainland Chinese stocks closed mixed, with the Shanghai composite falling 0.34% to 3,582.60 while the Shenzhen component climbed 0.332% to 14,492.82. Japan’s Nikkei 225 rose 0.34% to close at 28,804.85 while the Topix index gained about 0.1% to finish the trading day at 2,002.23. South Korea’s Kospi closed mildly lower at 3,006.16. Oil prices resumed their climb on Friday on continued tightness in U.S. supply, but were headed for a flat finish on the week as coal and gas prices eased, curbing fuel-switching which had stoked demand for oil products for power. U.S. West Texas Intermediate (WTI) crude futures rose 81 cents, or 1%, to $83.31 a barrel, reversing part of Thursday’s 92 cent loss. Brent crude futures climbed 85 cents, or 1%, to $85.56 a barrel, recouping some of the previous session’s $1.21 slump. Brent touched a three-year high of $86.10 on Thursday but was on track to end the week unchanged. Gold inched higher and was poised for a second weekly gain on Friday, as a softer dollar provided some respite against higher U.S. bond yields and rising expectations that central banks could begin easing economic support. Spot gold rose 0.1% to $1,785.00 per ounce by 0216 GMT. U.S. gold futures edged 0.2% higher to $1,786.00.