MARKET SNAPSHOT: Dow Futures Rise 100 Points As Traders Cheer Earnings, With Goldman Sachs On Deck

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04/17/2018 | 01:07 pm


By Barbara Kollmeyer, MarketWatch



Big lineup of Fed speakers to come; Netflix, Tesla shares could be active



U.S. stock futures climbed Tuesday, as optimism over first-quarter earnings once again set the tone, with results from Goldman Sachs Group Inc. due before the bell and Netflix Inc. climbing on forecast-beating earnings.



Later, investors should track a busy schedule of Federal Reserve speakers for hints to the path of interest rates. Economic data reports ahead cover housing starts and industrial production.



What are the main benchmarks doing?



Dow Jones Industrial Average futures rose 158 points, or 0.7%, to 24,722, while S&P 500 futures added 13.8 points, or 0.5%, to 2,695.50. Nasdaq-100 futures jumped 33 points, or 0.5%, to 6,745.



On Monday, as earnings cheer blotted out fears over Mideast tensions, the Dow briefly topped its 50-day moving average . The gauge closed 212.90 points, or 0.9%, higher to end at 24,573.04. The S&P 500 index added 0.8% and turned positive for the year, while the Nasdaq Composite Index gained 0.7%.



What's driving markets



An upbeat attitude toward first-quarter earnings was expected to remain a driving factor for stocks Tuesday. S&P 500-listed companies are expected to see earnings growth of 17.3% for the period, the fastest rate since 2011. Goldman Sachs results will be closely watched, as bank earnings so far have failed to impress markets.



A lack of escalation in the trade tensions between China and the U.S. has also emboldened investors. That confidence may take a knock on news the U.S. is searching for ways to retaliate against Beijing for its measures restricting access for American tech companies to the Chinese market.



Meanwhile, China reported forecast-beating first-quarter economic growth of 6.8% on Tuesday. That growth was lifted by surprisingly strong exports, suggesting U.S. trade tensions have yet to make an impact.





Elsewhere, U.S. and U.K. officials warned that Russia has increased cyberattacks on American and British companies and government agencies . Relations between the three countries have been strained since the U.S., France and Britain launched missile attacks on the chemical-weapons facilities of the Russian-supported Syrian government.



Which stocks are in focus?



Goldman Sachs and UnitedHealth Group are due before the bell. Johnson & Johnson was up 0.7% premarket after profit and revenue beat forecasts and the pharmaceutical and consumer products group lifted its sales outlook . Reports from IBM Corp.(IBM) and United Continental Holdings are due after the close.





Netflix shot up 7% in premarket trading. The streaming-media company reported first-quarter results late Monday that blew past Wall Street forecasts.



Plus: Analysts applaud Netflix for another 'home-run quarter'





Tesla dropped 1.5% in premarket after the electric car maker confirmed it has halted production of its Model 3 auto for a second time.



What are strategists saying?



Jeroen Blokland, portfolio manager on the Robeco Global Allocation team, chalked the move higher for U.S. stock futures down to several factors: "No immediate further escalation on trade (although this is very shaky at the moment); earnings living up to expectations, which is pretty OK given the fact that expectations are demanding; China's economy (for what it's worth) is still doing OK, even though credit growth is going down," he told MarketWatch.



What is on the economic docket?



Several Fed officials are lined up to speak in public on Tuesday. San Francisco Fed President John Williams, who has said he backs three or four gradual interest rate rises this year, is scheduled to give a speech in Madrid at 9:15 a.m. Eastern Time.



In another calendar highlight, Fed Vice Chair for Financial Supervision Randal Quarles will testify to the House Finance Committee on regulatory reform at 10 a.m.



Three non-voting Fed members are on the docket: Philadelphia Fed President Patrick Harker is set to give a talk on the economics of higher education at St Joseph's University in Philadelphia at 11 a.m., while Dallas Fed President Rob Kaplan is scheduled to appear at an International Economic Forum of the Americas event in Coral Gables, Fla. at noon. Chicago Fed President Charles Evans is due to speak on the economy and monetary policy to the Chicago Rotary Club at 1:10 p.m.



As for economic updates, readings on housing starts and building permits for March are scheduled for release at 8:30 a.m. Eastern Time, with a figure of 1.255 million expected for the starts. Data on industrial production and capacity utilization for the same month are due at 9:15 a.m. Eastern.



What are other markets doing?



Asian markets had a mostly weaker session , led by Taiwan's Taiex . European stocks were higher (https://www.clarks.co.uk/c/Step-AllenaBay/p/26134182). The FTSE 100 index also turned higher after the pound lost ground against the dollar.



Gold futures were off 0.5% at $1,344.50 an ounce, and the ICE U.S. Dollar Index was flat at 89.498. May West Texas Intermediate crude flattened out at $66.27 a barrel.





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