US Futures Steady as Robust Bank Earnings Reassure: Markets Wrap

(Bloomberg) — US equity futures pointed to a steady open, as earnings from a trio of Wall Street banks beat expecations. Treasuries rose.

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Shares of Citigroup Inc., Bank of America Corp. and Goldman Sachs Group Inc. rose after all three topped revenue forecasts. S&P 500 contracts and Nasdaq 100 futures were little changed.

Corporate America is benefitting from lower rates early into the Federal Reserve’s easing cycle, defying reduced profit forecasts. The latest batch of bank results follow forecast-topping earnings from JPMorgan Chase & Co and Wells Fargo & Co. last week.

Energy shares fell in premarket trading, as oil prices plunged below $75 a barrel after a report Israel will hold off attacking Iranian oil facilities. The yield on the 10-year Treasury benchmark fell 3 basis points.

Investors’ allocations nearly tripled from last month, to a net 31% overweight, according to the latest survey by Bank of America. Bond allocations saw a record swing to a net 15% underweight.

The bullish mood is being fueled by Federal Reserve cuts, China stimulus and the prospect of a soft economic landing in the US, according to the bank’s strategists.

Nathan Thooft, chief investment officer and senior portfolio manager at Manulife Investment Management, expects earnings season to be pretty good, partly because expectations have been lowered. “Consensus is around 4% year-over-year,” he said. “It’s a fairly low bar.”

Among other premarket movers, Nvidia Corp. and Advanced Micro Devices Inc. after Bloomberg reported the Biden administration discussed capping sales of advanced AI chips to some countries.

Key events this week:

• Goldman Sachs, Bank of America, Citigroup earnings, Tuesday

• Fed’s Mary Daly, Adriana Kugler speak, Tuesday

• Morgan Stanley earnings, Wednesday

• ECB rate decision, Thursday

• US retail sales, jobless claims, industrial production, Thursday

• Fed’s Austan Goolsbee speaks, Thursday

• China GDP, Friday

• Fed’s Christopher Waller, Neel Kashkari speak, Friday

Some of the main moves in markets:

Stocks

• S&P 500 futures were little changed as of 8:17 a.m. New York time

• Nasdaq 100 futures were little changed

• Futures on the Dow Jones Industrial Average were little changed

• The Stoxx Europe 600 was little changed

• The MSCI World Index was little changed

Currencies

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• The Bloomberg Dollar Spot Index was little changed

• The euro was little changed at $1.0908

• The British pound rose 0.2% to $1.3082

• The Japanese yen rose 0.3% to 149.29 per dollar

Cryptocurrencies

• Bitcoin fell 0.5% to $65,562.88

• Ether fell 1.1% to $2,593.26

Bonds

• The yield on 10-year Treasuries declined three basis points to 4.07%

• Germany’s 10-year yield declined three basis points to 2.24%

• Britain’s 10-year yield declined four basis points to 4.20%

Commodities

• West Texas Intermediate crude fell 4.2% to $70.76 a barrel

• Spot gold rose 0.1% to $2,651.60 an ounce

This story was produced with the assistance of Bloomberg Automation.

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