US. Stock Market

US Stock Index Futures Edge Higher after Apple, Facebook Beat Estimates

The major U.S. stock indexes were trading higher during the pre-market session on Thursday on the back of strong quarterly earnings reports from Apple and Facebook. The move represented a rebound from Wednesday’s session where U.S. stocks drifted lower as investors assessed the impact of the Federal Reserve’s monetary policy statement.

Early in the session on Thursday, futures contracts linked to the blue chip Dow Jones Industrial Average gained 88 points, benchmark S&P 500 Index futures and the tech-related NASDAQ-100 Index futures also traded in positive territory, putting them in a position to test record highs.

We’re probably looking at a delayed reaction to three major events from Wednesday. The Fed made its announcements during the last two hours of the trading session. Apple and Facebook made their announcement after the cash market close and President Joe Biden addressed Congress at 01:00 GMT.

Fed Recap

The Federal Reserve said that it would hold interest rates near zero. The S&P slid from its high after Federal Reserve Chairman Jerome Powell said during a press conference following the Federal Open Market Committee’s (FOMC) decision that there are some signs of froth in the market.

The Fed also took a rosier view of the U.S. economic recovery and the nation’s war against the coronavirus, but said it was too early to consider rolling back its emergency support with so many workers still left jobless by the pandemic.

Though inflation is due to rise, Powell said the coming price increases would almost surely be of a passing nature, and not present the sort of persistent problem that would force the Fed to begin raising interest rates sooner than expected.

Apple and Facebook Post Strong Quarterly Earnings

Apple reported a blowout quarter late Wednesday, announcing companywide sales up 54% higher than last year, and significantly stronger profits than Wall Street expected. Apple stock rose over 4% at one point in extended trading.

Facebook stock price was up more than 6% in after-hours trading on Wednesday after the company released its first-quarter earnings, beating Wall Street’s expectations for earnings and revenue.

Joe Biden’s Speech Before Congress

Late Wednesday evening, President Joe Biden proposed a sweeping new $1.8 trillion plan in a speech to a joint session of Congress on Wednesday, pleading with Republican lawmakers to work with him on divisive issues and to meet the stiff competition posed by China.

Pushing a vision of more government investment funded by the wealthy, the Democratic president urged Republicans who have so far resolutely opposed him to help pass a wide array of contentious legislation from taxes to police reform to gun control and immigration.

Thursday Outlook

Thursday is the busiest day of the earnings season, with roughly 11% of the S&P 500 slated to provide quarterly updates. Caterpillar, McDonald’s, Comcast and Merck are among the names on deck before the market opens. Amazon, Gilead Sciences, Twitter, U.S. Steel and Western Digital will post quarterly results after the market closes.

For a look at all of today’s economic events, check out our economic calendar.

Published by

James Hyerczyk

James A. Hyerczyk has worked as a fundamental and technical financial market analyst since 1982. His technical work features the pattern, price and time analysis techniques of W.D. Gann.