XLK - Nasdaq futures pop on Meta; S&P Dow up as First Republic stabilizes

2023-04-27 05:48:37 ET

Stock index futures point to a higher open Thursday as Big Tech earnings continue to impress and bank worries eased.

Nasdaq 100 futures ( NDX:IND ) +0.9% , S&P futures ( SPX ) +0.6% and Dow futures ( INDU ) +0.3% were higher.

"There’s been a bit of a tug-of-war in markets over the last 36 hours between the dominance of US tech pulling aggressively on one side against the still shaky foundations of US regional banks on the other," Deutsche Bank's Jim Reid said. "Meta's positive after the bell earnings have helped again overnight but the battle is set to continue. Amazon, Intel and Mastercard headline earnings today."

Nasdaq futures were boosted by a 10% pop in Meta ( META ) post-earnings as ads recovered, while the conference call focused on AI .

Meanwhile Financials ( XLF ) were higher premarket as the bleeding in First Republic ( FRC ) staunched. FRC was up 2% before the bell after a 30% tumble in the previous session .

"First Republic Bank has again crystalized lingering concerns over the wider sector," ING said.

Rates were higher. The 10-year Treasury yield ( US10Y ) rose 3 basis points to 3.46%. The 2-year yield ( US2Y ) rose 5 basis points to 3.97%.

After a bounce in the odds of the Fed standing pat next week on First Republic's trouble, the market is back to pricing in a one-in-four chance of no move. But there could be an argument for a strategic Fed pause .

The first look at Q1 GDP arrives ahead of trading. Economists expect that growth dropped to an annual rate of 2%.

"This number will be revised for years to come, and may well end up having little resemblance to today’s release. None of this will stop the breathless sensationalism of media reporting, nor politicians spinning the data right round (like a record)," UBS' Paul Donovan wrote. "What can we actually say about the US economy? We are reasonably confident it slowed in the first quarter."

"Two years of negative real wage growth has transferred income from consumers to companies, and lower savings and higher credit card debt are now limiting that. However, we also know official data misses more and more economic activity - as people rarely pay more tax than they need to, the positive tax revenue surprises hint at that."

Weekly initial jobless claims come out at the same time. The forecast is for a slight rise to 248K.

Claims are "still low historically but edging up slowly since February and now flirting with 18-month highs," Reid said. "So certainly one to watch over the next few weeks."

After the bell, March pending home sales arrive. The consensus is for a 0.5% rise.

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