Relevance up to 09:00 2022-07-28 UTC–4
Stocks and US equity futures rallied on Wednesday as a batch of resilient company earnings helped alleviate some caution in markets ahead of a pivotal Federal Reserve monetary-policy meeting.
Contracts on the technology-heavy Nasdaq 100 gained in the premarket after reassuring reports from Alphabet Inc., Microsoft Corp. and Texas Instruments Inc.
European stocks also rose, and the banking sector went up, even though Credit Suisse Group AG posted a larger-than-expected loss and Deutsche Bank AG warned on costs.
Monetary policy tightening, Europe’s energy woes amid Russia’s invasion of Ukraine and challenges from China’s property sector and Covid are among the risks darkening the global outlook. The International Monetary Fund warned that the global economy could soon be on the cusp of an outright recession.
The mood remains edgy ahead of a much-anticipated Fed interest-rate hike, part of a global wave of monetary tightening to quell inflation that is stocking concerns about a worldwide economic slowdown. Investors are bracing for the busiest reporting day of the season and a slew of macroeconomic data on Thursday.
Orders placed at US factories for durable goods increased unexpectedly in June, favored by rising military equipment production and steady demand for equipment despite rising interest rates.
US company earnings are providing a sliver of hope – more than three-quarters of the firms that have reported so far either beat or met expectations. But there are doubts about how long they can weather economic challenges.
“Inflation is hurting companies and the question is whether these policy rate hikes are going to do anything to alleviate the pain,” Quadratic Capital Management founder Nancy Davis said.
US President Joe Biden will speak with Chinese leader Xi Jinping on Thursday amid fresh tensions over Taiwan. The White House is also considering whether to lift some tariffs on Chinese imports to stem inflation.
The MOEX Russia index has been recovering for the fourth day in a row after collapsing to the psychological mark of 2,000 points.
Key events to watch this week:Apple, Amazon, Meta earnings due this weekFed policy decision, briefing, WednesdayAustralia CPI, WednesdayUS GDP, ThursdayEuro-area CPI, FridayUS PCE deflator, personal income, University of Michigan consumer sentiment, Friday
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