Stock Futures Rise Ahead of Powell’s Comments; Tesla Falls, Netflix Surges
Positive Earnings Season Boosts Stock Index Futures
U.S. stock index futures saw a rise on Thursday as Tesla and Netflix kicked off the U.S. earnings season. Treasury yields also eased off multi-year peaks ahead of Federal Reserve Chair Jerome Powell’s remarks. The positive news from Netflix resulted in a 13.3% surge in premarket trading, as the streaming giant raised prices for some of its plans in the United States, Britain, and France. Meanwhile, Tesla faced a 5.1% decline as it missed Wall Street expectations in various areas, including gross margin, profit, and revenue. Tesla’s CEO Elon Musk expressed concerns about high interest rates and the company’s plans for a factory in Mexico. Legacy automakers Ford Motor and General Motors also experienced losses of around 1% each.
Treasury Yields Surge, Fed Officials Scheduled to Speak
Yields on benchmark Treasury notes surged on Thursday, with the 2-year yield reaching a 17-year high and the 10-year yield inching closer to levels not seen since 2007. Federal Reserve Chair Jerome Powell is scheduled to speak at 12 p.m. ET, along with other Fed officials throughout the day. On Wednesday, Fed policymakers signaled a pause in interest rate hikes for the next couple of months as they monitor progress in their fight against inflation. Raffi Boyadjian, lead investment analyst at forex broker XM, noted that investors are slowly accepting the “higher for longer” reality of interest rates.
Traders’ Bets on Unchanged Interest Rates
Traders’ bets on interest rates remaining unchanged in November and December stood at around 94% and 61% respectively, according to CME’s FedWatch Tool. This reflects the expectation that the Fed may not raise rates further in the near future. Alongside Powell’s remarks, market participants will also keep an eye on weekly jobless claims, the October Philly Fed Business Index, and September existing home sales data.
Lam Research Falls, Las Vegas Sands Rises
Lam Research, a chip manufacturing equipment supplier, experienced a 2.1% decline as its second-quarter revenue forecast fell slightly below Wall Street estimates. On the other hand, Las Vegas Sands, a casino operator, saw a 5.4% rise in response to better-than-expected third-quarter profit and revenue. AT&T, the telecom firm, also added 3.3% after raising its annual free cash flow forecast.
Overall, stock futures remain positive as investors eagerly await Powell’s comments and continue to analyze earnings reports.
