Five things you need to know before the market opens on Thursday April 27:
1. -- Stock Futures Higher As Tech Profits Offset Bank Sector Woes
U.S. equity futures nudged higher Thursday, while the dollar slipped lower against its global peers, as investors braced for a heavy slate of corporate earnings prior to the opening bell as well as Amazon's closely-tracked first quarter update after the close of trading.
Stocks finished firmly lower again Wednesday, pulling the S&P 500 closer to the 4,000 point mark, amid renewed concerns over the health of the banking sector as First Republic (FRC) fell 29.75% to a record low in heavy trading volume on reports its looking to offload billions of assets from its balance sheet.
Bloomberg also reported that the FDIC could lower its ratings assessment on First Republic in a move that could restrict its access to borrowing from the Federal Reserve.
Better-than-expected first quarter earnings from Facebook parent Meta Platforms provided an after-hours boost to investor sentiment, but the narrow passage of a House Republican bill that would raise the debt ceiling only if paired with significant spending cuts has raised the risk of a potential showdown with Democratic lawmakers, as well as President Joe Biden, over the coming months.
Treasury bond yields were modestly higher in the overnight session, although 2-year notes were still firmly below the 4% mark at 3.982% while 10-year notes bumped to 3.467%.
The U.S. dollar index, which tracks the greenback against a basket of its global peers, was marked 0.11% lower at 101.358.
Aside from today's earnings slate, which includes Mastercard (MA), Eli Lilly (LLY), Merck (MRK) and Caterpillar (CAT), investors will also navigate weekly jobless claims data and the Commerce Department's first estimate of first quarter GDP at at 8:30 am Eastern time.
Personal consumption is likely to have powered a first quarter growth rate of 1.9%, according to analysts' forecasts, a tally that compares to the Atlanta Fed's running estimate of 1.1% for the current quarter.
Heading into the start of the trading day on Wall Street, futures tied to the the S&P 500 are priced for a 19 point opening bell gain while those linked to the Dow Jones Industrial Average are set for an 80 point bump. The tech-focused Nasdaq was marked 110 points higher.
Overnight in Asia, the region-side MSCI ex-Japan index was marked 0.2% higher into the close of trading, while European stocks were up 0.2% in early Frankfurt dealing.
2. -- Meta Shares Soar As Facebook Growth, Cost Cuts Power Q1 Earnings Beat
Meta Platforms (META) shares surged higher in pre-market trading after the Facebook parent smashed Street earnings forecast while forecasting solid near-term revenues.
Meta said group revenues rose 2.65% from last year -- its first annual gain since 2021 -- to $28.1 billion, as monthly active users across its 'Family of Apps' rose 2% from last year to just under 3 billion. Looking into the current quarter, Meta said it sees revenues in the region of $29.5 billion to $32 billion, a range that fall under the Street forecast of $32.3 billion.
The group's overall profits for the three months ending in March were pegged at $2.20 per share, down 19.1% from the same period last year but firmly ahead of the Street consensus forecast of $2.03 per share.
"Q1 was a solid quarter for our business," CEO Mark Zuckerberg told investors on a conference call late Wednesday. "Our global community continued to grow, we made important progress on our company priorities and improved the efficiency of our operations while strengthening the financial position of the company, which sets us up well to execute on the opportunities ahead."
Meta shares were marked 11.22% higher in pre-market trading to indicate an opening bell price of $232.90 each.
3. -- Amazon Earnings On Deck As Tech Reporting Rolls On
Amazon (AMZN) shares were marked firmly higher in pre-market trading ahead of the tech and retail giant's closely-tracked first quarter earnings slated for after the bell.
Analysts are looking for Amazon to post a bottom line of 21 cents per share, down 43.2% from last year, with revenues rising 7% to $124.5 billion.
Recent figures from retail research group YipitData suggests Amazon's March quarter sales in north America should top Street forecasts of $75.2 billion. That likely puts extra focus on Amazon's ongoing cost-cuts as well as growth rates in its Amazon Web Services division.
Amazon unveiled additional job cuts last week, with moves to pare hundreds of jobs at Whole Foods, the upscale grocery store chain it purchased for $13.7 billion in 2017, over the coming months. Earlier this year, CEO Andy Jassy detailed plans to reduce the group's global workforce by around 18,000.
Analysts are suggesting AWS revenue growth will slow to around 15%, taking in $21.2 billion, before accelerating firmly over the back half of the year.
Amazon shares were marked 2.75% higher in pre-market trading to indicate an opening bell price of $107.80 each
4. -- Intel Outlook In Focus As Chipmaker Preps Q1 Earnings
Intel (INTC) shares edged higher in pre-market trading ahead of the chipmaker's first quarter earnings report after the closing bell.
Intel, which slashed its dividend in February as looks to deliver on its promise of $8 billion to $10 billion in cost cuts over the next two years, is expected to post an adjusted loss of 15 cents per share. Revenues are likely to fall nearly 40% from last year to just over $11 billion, reflecting what CEO Pat Gelsinger has called a "transformation" for Intel "during this period of macroeconomic uncertainty".
Intel itself forecast revenues slowing to between $10.5 and $11.5 billion over the March quarter and gross margins narrowing to around 34.1%, nearly half of the chipmaker's long-term target of around 60%, with weak PC demand expected to last well into the first half of the year.
Intel shares were marked 0.8% higher in pre-market trading Thursday, indicating an opening bell price of $29.28
5. -- Samsung Profits Top Estimates, Outlook Lifts U.S. Chipmakers
Samsung Electronics posted firmer-than-expected first quarter profits late Wednesday, and although its bottom line was the softest in more than a decade, the world's biggest chipmaker forecast a second half recovery that could boost U.S. semiconductor stocks heading into the start of trading.
Samsung's operating profit fell 95% from last year to 640 trillion won over the three months ending in March, modestly higher than its 600 billion estimate from earlier this month but the weakest overall tally in fourteen years.
The group's chip division, the world's biggest, booked a $3.4 billion loss amid what it described as a glut in global chip supplies and a pullback in customer demand. Its mobile business had operating profits of $2.9 billion.
Still, the group spend a record 10.7 trillion won in capex over the quarter, as it prepares for second half growth powered by AI and high-performance chip demand and the impact of inventory run-offs.
Samsung shares ended 0.78% higher in South Korea trading Thursday, while U.S. chipmakers Nvidia (NVDA) and Advanced Micro Devices (AMD) were up 1.1% and 0.92% respectively.
