Stock Market Update

Equity futures point to a higher opening this morning as the market reacts to the earnings reports of some of its largest components, while a pullback in oil prices adds to the positive sentiment.

Yesterday evening's batch of mega-cap earnings produced mixed results, with Alphabet (GOOG 373.58, +26.27, +7.6%) and Amazon (AMZN 269.70, +6.66, +2.5%) moving higher, while Microsoft (MSFT 416.30, -8.16, -1.9%) and Meta Platforms (META 607.16, -61.96, -9.3%) fell behind.

Additionally, a host of other bellwether stocks, such as Caterpillar (CAT 857.00, +46.95, +5.8%) and Eli Lilly (LLY 906.96, +55.75, +6.6%) are making sharp moves in the premarket in response to earnings.

This morning will also feature a full data slate that includes the advance Q1 GDP reading (Briefing.com consensus 2.1%) and the March Personal Income and Spending Report in addition to the weekly jobless claims report (Briefing.com consensus 217K). In particular, the PCE Price Index (Briefing.com consensus 0.6%) is always watched closely as it is the Fed's preferred inflation gauge.

Yesterday's FOMC meeting produced no changes to the Fed Funds target range, and the flattish finish of the S&P 50 reflects a market coming to terms with its next rate cut not coming for quite some time.

In corporate news:

• Alphabet (GOOG 373.58, +26.27, +7.6%) beat EPS expectations by $2.48, beat revenue expectations, saw Google Cloud revenue increase 64% year-over-year, and increased its dividend by 5%.
• Amazon (AMZN 269.70, +6.66, +2.5%) beat EPS expectations by $1.15, beat revenue expectations, and guided Q2 revenues above consensus.
• Meta Platforms (META 607.16, -61.96, -9.3%) beat EPS expectations by $3.77, beat revenue expectations, guided Q2 revenues in-line, and increased its FY26 capital expenditure guidance.
• Microsoft (MSFT 416.30, -8.16, -1.9%) beat EPS expectations by $0.22 and beat revenue expectations.

Reviewing overnight developments:

Equity indices in the Asia-Pacific region ended Thursday on a mostly lower note with South Korea's Kospi (-1.4%) opening at a fresh record before reversing. Japan's Nikkei: -1.1%, Hong Kong's Hang Seng: -1.3%, China's Shanghai Composite: +0.1%, India's Sensex: -0.8%, South Korea's Kospi: -1.4%, Australia's ASX All Ordinaries: -0.3%.

In news:

• April Manufacturing PMI readings from China showed an ongoing expansion at a slow pace while Non-Manufacturing PMI (49.4) dipped below 50.0, signaling a contraction in the services sector.
• Japan sold 2-yr JGBs to very strong demand.
• Standard & Poor's affirmed South Korea's AA rating with a Stable outlook.

In economic data:

• China's April Manufacturing PMI 50.3 (expected 50.1; last 50.4) and Non-Manufacturing PMI 49.4 (expected 49.9; last 50.1). April RatingDog Manufacturing PMI 52.2 (expected 50.9; last 50.8)
• Japan's March Industrial Production -0.5% m/m (expected 1.0%; last -2.0%) and March Retail Sales 1.7% yr/yr (expected 0.9%; last -0.1%). April Household Confidence 32.2 (expected 32.8; last 33.3), March Housing Starts -29.3% yr/yr (expected -28.7%; last -4.9%), and Construction Orders -14.4% yr/yr (last 42.7%)
• South Korea's March Retail sales 1.8% m/m (last -0.3%), March Industrial Production 3.6% yr/yr (expected 3.8%; last -2.3%), and March Service Sector Output 1.4% m/m (last 0.3%)
• Singapore's Q1 Unemployment Rate 2.1% (last 2.0%) and March Bank Lending SGD902.3 bln (last SGD893.6 bln). Q1 Business Expectations 17.0 (last 11.0)
• Australia's March Housing Credit 0.6% m/m (last 0.6%), and Private Sector Credit 0.7% m/m (expected 0.6%; last 0.6%). Q1 Import Price Index 0.1% qtr/qtr (expected 0.4%; last 0.9%) and Export Price Index 0.5% qtr/qtr (last 3.2%)
• New Zealand's April ANZ Business Confidence -10.6 (last 32.5)

Major European indices trade on a mostly higher note after overcoming some early weakness. STOXX Europe 600: +0.7%, Germany's DAX: +0.8%, U.K.'s FTSE 100: +1.3%, France's CAC 40: -0.2%, Italy's FTSE MIB: +0.2%, Spain's IBEX 35: UNCH.

In news:

• Flash Q1 GDP readings from Germany, Italy, and Spain beat expectations while France lagged, reporting no growth.
• The Bank of England left its bank rate at 3.75%, as expected, while the European Central Bank is also expected to hold its policy steady later this morning.
• Societe Generale, BNP Paribas, and Stellantis are under pressure after disappointing earnings.

In economic data:

• Eurozone's Q1 GDP 0.1% qtr/qtr (expected 0.2%; last 0.2%); 0.8% yr/yr (expected 0.9%; last 1.2%). Flash April CPI 1.0% m/m (last 1.3%); 3.0% yr/yr, as expected (last 2.6%). Flash April Core CPI 2.2% yr/yr, as expected (last 2.3%)
• Germany's Q1 GDP 0.3% qtr/qtr (expected 0.1%; las 0.3%); 0.3% yr/yr, as expected (last 0.4%). March Retail Sales -2.0% m/m (expected -0.3%; last -0.3%); -2.0% yr/yr (expected 0.5%; last 0.9%). March Import Price Index 3.6% m/m, as expected (last 0.3%); 2.3% yr/yr (expected 1.6%; last -2.3%). April Unemployment Change 20,000 (expected 4,000; last 3,000), and Unemployment Rate 6.4% (expected 6.3%; last 6.4%)
• France's Q1 GDP 0.0% qtr/qtr (expected 0.2%; last 0.2%); 1.1% yr/yr (last 1.3%). Flash April CPI 1.0% m/m (expected 0.9%; last 1.0%); 2.2% yr/yr (expected 2.0%; last 1.7%). March PPI 2.0% m/m (last -0.3%); 0.2% yr/yr (last -2.4%). March Consumer Spending 0.7% m/m, as expected (last -1.4%)
• Italy's Q1 GDP 0.2% qtr/qtr (expected 0.1%; last 0.3%); 0.7% yr/yr (expected 0.6%; last 0.8%). March Unemployment Rate 5.2% (expected 5.3%; last 5.4%). Flash April CPI 1.2% m/m (expected 0.9%; last 0.5%); 2.8% yr/yr (expected 2.6%; last 1.7%)
• Spain's Q1 GDP 0.6% qtr/qtr (expected 0.5%; last 0.8%); 2.7% yr/yr, as expected (last 2.7%). March Consumer Confidence 66.9 (last 83.9). February Current Account surplus EUR4.04 bln (last surplus of EUR2.73 bln)