Tuesday July 27th

27-07-2021

S&P 500 futures dip with Big Tech earnings on deck

U.S. stock index futures fell in early trading Tuesday ahead of quarterly earnings reports from several megacap technology companies. Futures on the Dow Jones Industrial Average declined 100 points. S&P 500 futures slipped 0.2% and Nasdaq 100 futures traded flat. The major U.S. stock averages closed the previous session at record highs to each notch five-day win streaks. Shares of Tesla rose about 2.3% in premarket trading following a better-than-expected second-quarter earnings report. The electric vehicle maker passed $1 billion in quarterly net income for the first time. Second-quarter earnings season continues with Google-parent Alphabet, Microsoft and Apple set to report after the bell Tuesday. “It appears that we’re going to get really solid earnings from these companies and that should give a little bit of a boost to the market. Some of these names have already run so much this year that perhaps we don’t get a large bounce,” said Victoria Fernandez, Crossmark Global Investments’ chief market strategist. “Apple may be your best opportunity to see some movement because they’ve been in more of a consolidation phase over the last few months,” Fernandez added. The Federal Reserve’s two-day policy meeting begins Tuesday. Investors are awaiting insights into the central bank’s monetary policy. The Federal Open Market Committee will release a statement when the meeting concludes Wednesday, followed by Chairman Jerome Powell’s news conference. “I empathize with Fed Chair Jay Powell as he walks a delicate tightrope — preparing markets for tapering while assuring that the Fed will be very patient and thoughtful as it starts its normalization process,” Invesco Chief Global Market Strategist Kristina Hooper said in a note. Hong Kong markets continued selling off on Tuesday, extending losses from Monday. The broader Asia-Pacific markets, meanwhile, were mixed. The broader Hang Seng index in Hong Kong briefly fell more than 5% in Tuesday afternoon trade before paring some of those gains, eventually closing 4.22% lower at 25,086.43. The index has fallen more than 8% in just two days as regulatory fears surrounding China’s technology and private education sector weighed on investor sentiment. On Monday, it fell more than 4%. Hong Kong-listed shares of Chinese tech giant Tencent fell 8.98% while Alibaba dropped 6.35% and Meituan declined 17.66%. The Hang Seng Tech index slipped 7.97% on the day to 6,249.65. Mainland Chinese stocks also saw sizable losses on the day, with the Shanghai composite down 2.49% to 3,381.18 while the Shenzhen component dropped 3.672% to about 14,093.64. Industrial firms’ profits in China jumped 20% year-on-year in June, official data showed Tuesday. Still, that was a decline from the 36.4% year-on-year increase seen in May. Elsewhere, the Nikkei 225 in Japan gained 0.49% to close at 27,970.22 while the Topix index advanced 0.64% on the day to 1,938.04. South Korea’s Kospi rose 0.24% on the day to 3,232.53. Oil prices were steady on Tuesday with investors betting tight supply and rising vaccination rates will help offset any impact on demand due to surging Covid-19 cases worldwide. Brent crude futures climbed 26 cents, or 0.35%, to $74.76 per barrel, extending a 0.5% gain on Monday. U.S. West Texas Intermediate (WTI) crude futures rose 8 cents to $71.99 a barrel, after losing 16 cents on Monday. Gold prices were steady on Tuesday, pinned below the key $1,800 per-ounce level, as investors turned cautious ahead of this week’s U.S. Federal Reserve meeting outcome for clues on when the central bank might rein in its easy monetary policies. Spot gold was flat at $1,798.61 per ounce, as of 0108 GMT. U.S. gold futures fell 0.1% to $1,797.80 per ounce.