Five things you need to know before the market opens on Tuesday April 11:
1. -- Stock Futures Higher With Inflation Data, Earnings In Focus
U.S. equity futures edged higher Tuesday, with Treasury bond yields holding steady and the dollar extending gains against its global peers, as traders look ahead to key inflation data and the start of the first quarter earnings season later in the week.
Markets are likely to key on tomorrow's March CPI data following a surprise jump in inflation expectations, reported as part of the New York Fed's monthly survey, during yesterday's session.
Year-ahead inflation expectations jumped by 50 basis point to 4.7% in March, the survey indicated, even as participants noted the tightest overall credit conditions since 2014 in the wake of the Silicon Valley Bank collapse and the closure of Signature Bank shortly afterwards.
Federal Reserve Bank of New York President John Williams, however, told an event at New York University last night that he didn't see a significant connection between the March bank crisis and the central bank's efforts to slow inflation, adding that he doesn't "worry too much" about market projections of a late-year rate cut.
The CME Group's FedWatch is pricing in at least a 66% chance of a May rate hike, which would take the Fed Fund rate to a range of between 5% and 5.25%, next month in Washington, but those odds are likely to change significantly if tomorrow's CPI report shows a bigger-than-expected cooling in consumer price pressures.
Economists are forecasting headline inflation will slow to an annualized rate of 5.2%, with the closely-tracked core reading at 5.5%, compared to readings of 6% and 5.5% respectively over the month of February.
Muted market volatility, with the CBOE Group's VIX index trading firmly below the 20 point mark in overnight dealing, has helped keep Treasury bonds yield largely in place, with 2-year notes holding at 3.977% and benchmark 10-year paper changing hands at 3.387%.
The U.S. dollar index, which tracks the greenback against a basket of six global currency peers, was little-changed at 102.097.
JPMorgan (JPM), Citigroup (C) and Wells Fargo (WFC) will form a trio of banks reporting first quarter profits late this week, with Dow component UnitedHealth (UNH) kicking things off on Friday with its March quarter update at 6:00 am Eastern time.
Collective S&P 500 profits are expected to fall 5.2% from last year to a share-weighted $419.1 billion, with the second quarter tally expected to show a year-on-year decline of around 4%.
Heading into the start of the trading day on Wall Street, futures contacts tied to the S&P 500 are priced for an 11 point opening bell gain and those linked to Dow Jones Industrial Average are looking at a 44 point bump. Contacts tied to the tech-focused Nasdaq are indicating a 45 point advance.
Overnight in Asia, the MSCI ex-Japan index was marked 0.65% higher into the close of trading following softer-than-expected inflation data from China, which showed consumer prices rising at the slowest pace in 18 months an factory gate inflation falling at the steepest clip in more than two years.
Japan's Nikkei 225, meanwhile, gained 1.05% in Tokyo following the first official speech from Bank of Japan Governor Kazuo Udea, who vowed to keep the central bank's ultra-easy monetary policies in place as part of its broader effort to accelerate inflation in the world's third-largest economy.
2. -- Newmont Sweetens Bid For Australian Gold Miner Newcrest
Newmont Corp. (NEM) shares moved lower in pre-market trading after the Colorado-based gold giant made its best-and-final offer for Newcrest Mining Ltd. that would value the Australian group at just under $20 billion.
The all-share deal would see Newcrest stockholders receiving 0.4 of a Newmont share for each of their holdings, valuing the group at A$29.4 billion, a 5.3% improvement from Newmont's previous bid and 16% higher than its initial offer.
“This transaction would strengthen our position as the world’s leading gold company by joining two of the sector's top senior gold producers and setting the new standard in safe, profitable and responsible mining,” said Newmont CEO Tom Palmer.
If completed, the deal would extend Newmont's grip on the global gold mining market and give the collective companies an annual output that is more than twice that of Newmont's largest rival, Canada-based Barrick Gold.
Newmont shares were marked 2.02% lower in pre-market trading to indicate an opening bell price of $49.98 each.
3. -- Warren Buffett Boosts Exposure to Japan's Major Trading Houses
Billionaire investor Warren Buffett told Japan's Nikkei newspaper that he has increased his exposure to Japanese stocks, and could add more to this current holdings, ahead of a series of visits with business leaders later this week.
Buffett told that pager that his Berkshire Hathaway investment vehicle has a 7.4% in five separate Japanese trading housings, a notable boost from the 6% stakes he reported late last year, and hinted he would be happy to deploy more capital into the world's third largest stock market.
“We would love if any of the five would come to us ever and say, ‘We’re thinking of doing something very big or we’re about to buy something and we would like a partner or whatever'," the Nikkei quoted Buffett as saying ahead of his first Japan visit in more than 12 years.
Buffett plans to meet with each of the five major trading houses -- known as 'sogo shosha' -- later in the week. The names include Mitsubishi Corp., Mitsui, Itochu Corp., Marubeni Crop. and Sumitomo Corp.
The Nikkei 225, which is up around 8.6% for the year, trades at a forward P/E ratio of around 15.5x, a near 30% discount to the S&P 500, and its main constituents have more cash than debt, allowing for a forward dividend yield of around 2.7%, according to Saxo Bank strategists.
4. -- Pharma, Biotech Firms Call For Reversal Of Mifepristone Suspension
A group of more than 300 pharmaceutical and biotech companies, lead by big names such as Pfizer PFE and Biogen BIIB, have issued an open letter to a federal judge seeking a reversal of his ruling to suspend sales of the abortion pill mifepristone.
The letter says the ruling by Judge Matthew Kacsmaryk in the Northern District of Texas undermines the Federal Drug Administration's role in approving new medicines and "creates uncertainty for the entire biopharma industry."
"If courts can overturn drug approvals without regard for science or evidence, or for the complexity required to fully vet the safety and efficacy of new drugs, any medicine is at risk for the same outcome as mifepristone," the open letter stated.
Judge Kacsmaryk suspended the sale of mifepristone late last week ahead of a case brought by anti-abortion activists that will be argued in the District Court later this year. The U.S. Department of Justice is seeking to stay the Judge's order until the case, and any associated appeals, are complete.
Mifepristone, which was approved by the FDA in 2000, forms part of a treatment involving a second drug that is used in more than half of all U.S. abortions.
Pfizer shares were marked 0.07% lower in pre-market trading to indicate an opening bell price of $41.70 each. Biogen was little-changed at $282.86 each.
5. -- Bitcoin Tops $30,000 For the First Time In 10 Months
Bitcoin prices held firmly north of the $30,000 mark Tuesday after hitting a ten-month high in overnight trading that marked a 90% gain from its late November lows.
Traders are linking Bitcoin's recent moves to bets that the Federal Reserve has likely reached the end of its aggressive rate-hike cycle, with just one more increased priced-in by the CME Group's FedWatch, as central banks around the world pivot from their recent inflation fights in order to support growth.
Bitcoin gained more than 23% over the month of March, and has nearly doubled from its late-November lows that were triggered in part by the collapse of crypto trading platform FTX and the subsequent market turmoil.
Bitcoin was last seen trading 3% higher on the session at $30,071.70 each.
