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US stock futures edge higher after growth data

Apr 26 2019 15:18
Vildana Hajric, Bloomberg

US equity futures erased losses after data showed economic growth accelerated by more than forecast in the first quarter while the dollar headed for its best week since February.

Contracts on the S&P 500 Index edged higher after being down for most of the morning. Intel and American Airlines dropped in early trading after cutting forecasts for this year.

The Stoxx Europe 600 climbed as losses for raw material producers were offset by gains in media companies. Deutsche Bank fell to a two-week low after lowering its revenue target. Treasuries rose alongside most European sovereign debt, while oil retreated.

At the end of a busy week for earnings, investors are taking stock of both good and bad corporate surprises and cheering signs of economic strength.

US gross domestic product expanded at a 3.2% annualised rate in the January-March period, according to Commerce Department data Friday that topped all forecasts in a Bloomberg survey calling for 2.3% growth. That followed a 2.2% advance in the prior three months.

"Combine this GDP data with the earnings results we’re seeing and the market trajectory we’ve enjoyed, and things are looking pretty great," said Mike Loewengart, vice president of investment strategy for E*Trade Financial Corp.

"But we shouldn’t forget where we are in the business cycle. Many sectors are still tempering expectations for the future."

Shares were marginally lower in Asia as an unexpected tumble in Japanese industrial production underscored worries over the global expansion, while the yuan edged up after President Xi Jinping said China won’t engage in currency depreciation.

Elsewhere, developing-nation currencies and shares were steady. The pound was little changed, with Prime Minister Theresa May’s government set to continue talks with the main opposition Labour Party aimed at securing a Brexit compromise.

These are the main market moves:

Stocks

Futures on the S&P 500 Index rose 0.1% as of 08:46 in New York. The Stoxx Europe 600 Index increased 0.1%. The MSCI Asia Pacific Index was little changed. The MSCI Emerging Market Index rose 0.1%.

Currencies

The Bloomberg Dollar Spot Index was little changed near the highest in four months. The euro rose 0.2% to $1.1153. The Japanese yen was little changed at 111.64 per dollar. The British pound rose 0.1% to $1.2909. The MSCI Emerging Markets Currency Index rose 0.2%.

Bonds

The yield on 10-year Treasuries declined three basis points to 2.51%. Germany’s 10-year yield fell one basis point to -0.02%. Britain’s 10-year yield slipped one basis point to at 1.14%.

Commodities

The Bloomberg Commodity Index dipped 0.4%. West Texas oil fell 2%, the most in almost two months, to $63.75 a barrel. Copper climbed 0.6% to $2.8855 a pound. Gold climbed 0.3% to $1 281.04 an ounce.

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