Tuesday, April 26: Here are five things you must know.
Stock Futures Edge Fall With Busy Earnings Slate
In the midst of another pullback in Treasury bond yields, US equity futures fell on Tuesday, with the dollar continuing to climb above its global counterparts, as investors prepared for a busy slate of tech and industrial earnings that could be triggered by concerns over Federal Reserve rate hikes and China's lockdown.
Stocks got a good boost late yesterday as safe-haven trading cut bond yields, which move in opposite direction prices, from multi-year highs despite Elon Musk's successful $44 billion take-private offer to buy Twitter () -.
Despite the persistent Covid infection in China, that might cause lockdown orders in Beijing and is likely to keep supply chains disrupted across a number of industries, while posing pressures, in the coming months.
In early Frankfurt trading, European markets were marked 0.1 percent higher, thanks to a strong set of blue-chip earnings and weaker regional currencies, while the region's MSCI ex-Japan index increased 0.32%.
Stateside's benchmark 10-year note rates fell to 2.789% in overnight trading, while the dollar index, which trackes the greenback against a number of six global currencies, maintained at its recent two-year highs to trade with 101.903 in overnight dealing.
With General Electric () -, United Parcel Service () -, 3M () - and PepsiCo () reporting before the bell, tech giants Microsoft () - and Google () updating investors at the end of the session, a significant batch of earnings is expected to both drive pre-market trading and keep investors cautious into the closing bell.
Futures linked to the Dow Jones Industrial Average are indicating a 85-point opening bell drop, while those linked to the S&P 500 are priced for a 6-point drop.
2. -- Twitter Shares Edge Higher amid Key Questions About Musk's Take-Private Future
Following Elon Musk's unsuccessful attempt to acquire the social media group for $44 billion, Twitter's stock increased, although concerns remain about the future of the popular social media website.
Jack Dorsey, Musk's CEO, described the Tesla CEO as "the only trustworthy company I trust."
Jeff Bezos, an Amazon founder, has struck a different note, implying that Tesla's reliance on China for its growth and production might provide Beijing with a means to influence the social media platform.
Twitter's stock was marked 0.4 percent higher in pre-market trading, indicating an opening bell price of $51.90 each. That's still 4% south of Musk's bid price, but is roughly 32.5% higher than when he first made his 'passive' part in the company public on April 4.
3. -- HSBC shares fall as Asia-Focused Bank books credit losses and disrupts buybacks
After the global bank, which is heavily dependent on Asia's growth, HSBC shares fell in pre-market trading, claiming $640 million in anticipated credit losses, owing to Russia's conflict on Ukraine, global inflation, and China's Covid struggles.
The larger-than-expected charge, a $1 billion swing from the release of similar reserves over the same period last year, offset an otherwise solid set of first quarter earnings, which included a pre-tax profit of $4.2 billion.
However, a key measure of the bank's financial strength, its core capital ratio, decreased 170 basis points to 14.1%, and may further fall, with CFO Ewen Stevenson effectively suspending stock buybacks until broader condition improves.
The London-listed stocks of HSBC were rated 3.5 percent lower in early trading, indicating a $30.67 increase per day.
As PC demand fades, Microsoft gains are to highlight Azure Importance.
Following the closing of trading, Microsoft's stock was not much-changed in pre-market trading.
As cloud demand continues to drive growth, analysts anticipate to focus again on Azure's revenue growth trajectory. Microsoft's cloud computing platform is positioned to mitigate demand and chip constraints in the global marketplace.
The PC market may jeopardize both Microsoft's hardware division as well as its Windows software division, with demand dipping from the work-from-home boom that covered the past two years. The group's gaming division is also likely to retreat from the pandemic, placing even more pressure on Azure and the entire cloud division.
Microsoft's stock was marked 0.05% higher in pre-market trading, indicating an opening bell price of $280.76 each.
5. -- Google Earnings Stays In Focus As Ad Market Competition Hits
After the close of trading, Alphabet, the parent company of Google, posted a higher level Tuesday ahead of the group's first quarter earnings.
Google, which is facing fierce competition from China-based TikTok in the market for online video ads and engagement, is likely to fall back on both is broader search and cloud computing growth to increase its top and bottom lines, with analysts looking for $26.11 per share on revenue of around $68 billion.
In doing so, Google will need to drive investment in its artificial intelligence in the midst of a global ad dollars crisis, fueled by its capital expenditures and pressure profit margins. It is also facing the prospect of new measures on policing offensive and illegal content, recently passed by European legislators, that will increase costs.
Investors may also look into further details on the company's previously-announced stock split, which will be finalized in July.
In pre-market trading, Google's stock was significantly reduced by 0.05 percent, indicating a $2,461.00 opening bell price.