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(Bloomberg) – U.S. stock futures fell as profits from big tech companies fell short of Wall Street’s lofty expectations and investors braced for the Federal Reserve’s first interest rate decision of the year.
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Nasdaq 100 contracts fell 1.2% and S&P 500 contracts fell 0.5%. Microsoft Corp., Alphabet Inc. and Advanced Micro Devices Inc. were among those whose updates didn’t match the market hype around tech megacaps and artificial intelligence that fueled the recent record rally in U.S. stocks. It fell in pre-market trading.
“These are good numbers, but expectations are very high and there are real issues with travel and arrival,” Peter Oppenheimer, chief global equity strategist at Goldman Sachs Group, said on Bloomberg TV. “These companies have delivered impressive earnings growth and are in a very strong position, but short-term upside is likely to be limited from a market perspective given the expectations priced in. I think it’s expensive.”
Elsewhere, Paramount Global jumped 21% after Bloomberg reported that media mogul Byron Allen had offered the company $14.3 billion. Tesla Inc. fell as much as 3.4% after Elon Musk’s $55 billion pay plan for the electric car maker was rejected by a Delaware judge.
This day is also a busy day for settlement of accounts in Europe. Novo’s Nordisk A/S announced another surge in sales and profits this year thanks to its blockbuster anti-obesity drug Wegoby, making it the second European company to reach a market capitalization of $500 billion. It became a company feature. Shares in Hennes & Mauritz AB fell 10% after the company missed profit expectations and its chief executive resigned. Europe’s Stoxx600 index rose 0.3%.
All eyes then turned to the Federal Reserve, with the Federal Open Market Committee poised to keep interest rates in the 5.25% to 5.5% range for the first time in July, a 22-year high. The interest rate decision and accompanying statement will be announced in Washington at 2 p.m., with Chairman Jerome Powell holding a press conference 30 minutes later.
Traders believe there is about a 40% chance that the central bank will cut interest rates for the first time in March, but most Fed officials say it is too early to speculate on such a shift. Powell may say the recent decline in inflation is encouraging, but given the resilience of the labor market and economic growth, he may still show little urgency for easing.
“Even if that is not our scenario, the Fed has left the door open to a possible rate cut in March without sending a firm, definitive signal,” said Alexandre Ezez, chief investment officer at Groupe Richelieu in Paris. will remain open.”
On the European monetary policy front, data released on Wednesday showed a decline in price pressures in France, increasing optimism that the European Central Bank could start cutting interest rates as early as April. Ta. German 10-year bond yields fell by 8 basis points, and the euro also fell. Meanwhile, the dollar strengthened against the Group of Ten (G10) countries, but U.S. Treasury yields remained stable.
In Asia, yields on Japanese government bonds rose after a summary of the Bank of Japan’s meeting suggested it was close to raising interest rates for the first time since 2007. Japanese stocks also rose as signs that the Bank of Japan may move to end negative interest rates boosted optimism. Beyond lender profitability.
Shares in China and Hong Kong widened their losses after data showed factory activity in the country contracted for another month. Mainland stocks nearly erased gains caused by hopes of stronger support from authorities. A broad index of Asian stocks rose slightly.
Elsewhere, oil prices rose for the first time since September, as escalating attacks on ships in the Red Sea prompted the diversion of tanker traffic and raised concerns about further conflict in the Middle East.
Corporate highlights
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Media mogul Byron Allen has proposed buying all outstanding shares of Paramount Global for $14.3 billion, according to people familiar with his terms.
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Novo Nordisk said its sales and profits will soar again this year as it continues to roll out its blockbuster anti-obesity product Wegovy around the world.
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Hennes & Mauritz, Europe’s second-largest listed fashion retailer, has appointed Daniel Arbor as CEO, replacing Helena Helmarsson. The announcement came after the company reported fourth-quarter profits that were lower than expected.
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Novartis AG expects revenue to grow at a low-single-digit pace this year as the Swiss drugmaker focuses on medicines with greater growth potential.
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GSK raised its long-term outlook, boosted by sales of the drugmaker’s new RSV vaccine and other new drugs.
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Iliad SA has rejected an amended proposal by Vodafone Group to combine the two companies’ Italian operations, canceling its efforts to integrate in one of Europe’s most competitive telecom markets.
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Samsung Electronics posted its fourth straight quarterly profit decline in the holiday quarter, as a long-awaited recovery in demand for chips and electronics brought little profit to the world’s largest memory maker.
This week’s main events:
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Boeing releases financial results on Wednesday amid U.S. government safety investigation
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Fed interest rate decision and Fed Chairman Jerome Powell’s Wednesday press conference
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U.S. Treasury Quarterly Refunds Wednesday
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China Caixin Manufacturing PMI Thursday
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Eurozone S&P World Manufacturing PMI, CPI, Unemployment Rate, Thursday
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US productivity, construction spending, ISM manufacturing, new unemployment claims, Thursday
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Apple, Amazon, Meta, Deutsche Bank, BNP Paribas earnings, Thursday
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Bank of England interest rate decision Thursday
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US employment statistics, University of Michigan consumer sentiment, factory orders, Friday
The main movements in the market are:
stock
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As of 6:27 a.m. New York time, S&P 500 futures were down 0.5%.
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Nasdaq 100 futures fell 1.2%
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Dow Jones Industrial Average futures rose 0.2%.
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Stoxx European 600 rose 0.1%
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MSCI World Index little changed
currency
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Bloomberg Dollar Spot Index little changed
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The euro was almost unchanged at $1.0838.
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The British pound fell 0.1% to $1.2682.
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The Japanese yen fell 0.1% to 147.78 yen to the dollar.
cryptocurrency
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Bitcoin fell 2.4% to $42,494.51.
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Ether fell 3.7% to $2,291.39.
bond
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The 10-year government bond yield was almost unchanged at 4.03%.
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Germany’s 10-year bond yield fell 4 basis points to 2.23%.
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UK 10-year bond yields fell 2 basis points to 3.88%.
merchandise
This article was produced in partnership with Bloomberg Automation.
–With assistance from Tassia Sipahutar, Winnie Hsu, and Julien Ponthus.
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©2024 Bloomberg LP
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