U.S. stock futures rose Friday, but retreated from the highs of the overnight session as investors monitored corporate earnings results and looked for signs of easier monetary policy from Federal Reserve officials.
Ahead of the opening bell, futures for the S&P 500 (ES=F) rose 0.23%, or 6.75 points, as of 8:35 a.m. ET. Dow futures (YM=F) rose 0.34%, or 92 points, while Nasdaq futures (NQ=F) increased 0.27%, or 21.5 points.
Friday marks the last day before Federal Open Market Committee (FOMC) members enter a quiet period before their next meeting July 30-31. Two officials – St. Louis Fed President James Bullard, the sole dissenter at the June Fed meeting, and Boston Fed President Eric Rosengren – are set to deliver public remarks, at 11 a.m. and 4:30 p.m. ET, respectively.
There was some misunderstanding Thursday as markets took remarks from New York Fed President John Williams, wherein he stated that central bankers need to “act quickly” in the face of slowing economic growth, to imply a rate cut. However, the New York Fed clarified that the comments were not intended to imply specific policy moves at the next FOMC meeting.
Nevertheless, markets have still largely taken this week’s remarks to represent a chorus of dovishness, as central bankers underscored lingering uncertainties clouding the global outlook. Fed Vice Chair Richard Clarida, in an interview with Fox Business Thursday, acknowledged that the U.S. economy “is in a good place,” but added, “You don’t need to wait until things get so bad to have a dramatic series of rate cuts.”
As of Friday morning, markets priced in a more than 40% probability of a 50 basis point ease to key interest rates. The probability of a more aggressive cut to key borrowing costs has risen over the past couple weeks, even as data on U.S. manufacturing, retail sales and the labor market have strengthened.
But the U.S.-China trade relationship – one of the key uncertainties Fed officials and economists around the world have continued to highlight – still has yet to firm.
Top trade negotiators including U.S. Trade Representative Robert Lighthizer and U.S. Treasury Secretary Steven Mnuchin spoke with their Chinese counterparts this week in a phone call, according to multiple reports. No further details from the phone meeting were released. However, Mnuchin told CNBC earlier this week that in-person meetings were likely, if discussions with the Chinese delegation went well.
Earnings update
Meanwhile, corporate earnings season continues to chug along, with mixed results from some of the country’s largest corporations.
Microsoft (MSFT) beat bottom-line expectations and saw revenue surge by double digits over last year for a ninth consecutive quarter, pointing to ongoing growth for the more than 40-year-old company.
The company’s closely watched Intelligent Cloud segment, including its Azure public cloud, Windows Server and SQL Server, generated $11.39 billion in revenue, up 19% over last year and topping expectations. Azure’s revenue alone grew 64% in the quarter, and saw a gross margin percentage improvement.
Microsoft posted adjusted earnings of $1.37 per share on revenue of $33.7 billion, topping expectations for $1.22 per share on $32.8 billion, according to Bloomberg data.
Meanwhile, BlackRock (BLK), the biggest asset management firm in the world, disappointed on quarterly profit and revenue, the latter of which the company attributed to lower securities lending revenue and lower performance fees during the quarter. However, fixed income products resulted in net flows of $110.4 billion in the quarter, an increase of threefold over last year, as investors turned from risk assets to safe havens amid macroeconomic uncertainties.
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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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https://finance.yahoo.com/news/stock-market-news-july-19-2019-123613390.html
2019-07-19 12:36:00Z
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