Market Snapshot: U.S. stock futures waver even after Netflix earnings beat as Treasury yields rise

by | Oct 19, 2022 | Stock Market

U.S. stock futures on Wednesday see-sawed as benchmark Treasury yields moved further above 4%.How are stock-index futures trading
S&P 500 futures
ES00,
+0.46%
rose 8 points, or 0.2%, to 3740

Dow Jones Industrial Average futures
YM00,
+0.28%
rose 25 points, or 0.1%, to 30601

Nasdaq 100 futures
NQ00,
+0.74%
gained 47 points, or 0.4% to 11242

On Tuesday, the Dow Jones Industrial Average
DJIA,
+1.12%
rose 551 points, or 1.86%, to 30186, the S&P 500
SPX,
+1.14%
increased 95 points, or 2.65%, to 3678, and the Nasdaq Composite
COMP,
+0.90%
gained 354 points, or 3.43%, to 10676. The S&P 500 is up 4% from its 2022 closing low but remains down 22% for the year to date.

What’s driving markets Stocks were struggling to extend a two-day winning streak as worries about stubbornly high inflation counteracted good news on company earnings. U.S. equity futures had been higher in the early hours after a well-received update from Netflix
NFLX,
-1.73%
cemented the impression that the third-quarter earnings season would support the market. With 45 members of the S&P 500 having reported, 69% have beaten profit expectations, according to Refinitiv. The high proportion of beats comes as investors are the most pessimistic since the great financial crisis about future profit growth, according to a fund manager survey by Bank of America.

Source: Bank of America

Netflix’s positive surprise would help boost sentiment on Wall Street, said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, “following yesterday’s gains boosted by other resilient corporate earnings from the likes of Goldman Sachs and Johnson and Johnson”. Earnings highlights on Wednesday include Procter & Gamble
PG,
+0.81%,
and after the close, Tesla
TSLA,
+0.38%
and IBM
IBM,
+1.17%.
However, news that U.K. inflation was back at a 40-year high of 10.1% reminded traders that central banks’ determination to battle such price pressures meant yet tighter monetary policy. This has helped push the U.S. 10-year Treasury yield
TMUBMUSD10Y,
4.060%
further above the psychologically significant 4% mark, up another 5 basis points to 4.061% as the equivalent duration U.K. gilt
TMBMKGB-10Y,
3.992%
rose 4.9 basis points to 3.997%. “As has been the case of late, any disturbance in global fixed-income markets immediately hemorrhages into risk,” said Stephen Innes managing partner at SPI Asset Management. U.S. economic updates set for release on Wednesday include September building permits and housing starts at 8:30 a.m. and the Federal Reserve’s Beige Book of anecdotes at 2 p.m. All times Eastern. Minneapolis Fed President Neel Kashkari is due to speak at 1 p.m. and Chicago Fed President Charles Evans will deliver comments at 6:30 p.m.

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