Here are five things you must know for Thursday, April 21:
1. -- Stock Futures Leap Amid Earnings Boost, Treasury Yield Pullback
U.S. equity futures powered higher Thursday, while Treasury bond yields eased and the dollar retreated against its global peers, as investors look to ride a better set of first quarter earnings into the session.
A weaker session overnight in China, however, as well as another leg higher in oil prices are keeping some markets in check, with the former's 'zero Covid' policy set to hit second quarter GDP and cause further disruptions to global supply chains, according to IMF Managing Director Kristalina Georgieva.
The EU's potential ban on Russia crude exports is also lifting global oil prices, as is the bigger-than-expected decline in U.S. domestic crude stocks reported yesterday by the Energy Department, even as traders discount near-term China demand.
WTI crude futures for June delivery were marked $1.10 higher in overnight trading to change hands at $103.29 per barrel, while Brent contracts for the same month added $1.33 to trade at $108.19 per barrel,
In the U.S., a first quarter earnings blowout from Tesla (TSLA), as well as a robust near-term outlook from United Airlines (UAL) after the close of trading on Wednesday is adding some heft to U.S. equity futures ahead of weekly jobless claims data at 8:30 am Eastern time.
A modest pullback in Treasury bond yields, a well, is adding further support, with benchmark 10-year note yields slipping to 2.87% in overnight trading after briefly testing the 3% mark for the first time since 2019 in the overnight session.
Investors will also track comments from Federal Reserve Chairman Jerome Powell, as well as ECB President Christine Largarde, both of whom will speak at the IMF's springs meetings today in Washington.
In Europe, the region-wide Stoxx 600 added another 0.38% to yesterday's earnings-driven gains, with bluechips Nestle and ABB posting stronger-than-expected first quarter updates and French President Emanuel Macron winning a televised debate with his rival, the far-right Marine Le Pen, ahead of this weekend's second round elections.
Overnight in Asia, China stocks fell for a third consecutive session, pulling the region-wide MSCI ex-Japan index 0.33% lower into the close of trading,
On Wall Street, futures contacts tied to the Dow Jones Industrial Average indicating a solid 200 point opening bell gain while those linked the S&P 500 priced for a 36 point advance. Futures linked to the tech-focused Nasdaq are looking at a firmer 170 point opening bell gain.
2. -- Tesla Shares Surge After Powerful Q1 Earnings Beat, Upbeat Outlook From Elon Musk
Tesla (TSLA) shares surged in pre-market trading after the carmaker posted stronger-than-expected first quarter profits and record sales in the face of surging input prices and supply chain chaos.
CEO Elon Musk indicated there was a "reasonable shot" for 2022 deliveries to rise 60% from last year, noting the ramp-up of production facilities in Berlin and Austin, following a surprisingly solid first quarter that saw automotive profit margins rise to 30%, record sales of $18.76 billion and a stronger-than-expected bottom line of $3.22 per share.
Tesla said on April 2 that first quarter global deliveries rose 67.8% from last year to a record 310,048 units, just shy of analysts' forecasts of and only 0.5% from the final three months of 2021. The full-year delivery estimate stands at 1.47 million units.
"I’d like to thank the Tesla employees for their hard work, but also I’d like to thank our suppliers who’ve really gone the extra mile<" Musk told investors on a conference call late Wednesday. "We have an amazing supplier group and I would say a heartfelt thanks to the suppliers that have really worked day and night to ensure that Tesla is able to keep the factories running."
" we are growing very rapidly year-over-year and remain confident of exceeding 50% annual growth for the foreseeable future for basically several of the next years," Musk added.
Tesla shares were marked 7.14% higher in pre-market trading to indicate an opening bell price of $1,047.00 each.
3. -- United Airlines Shares Soar After Forecasting Record Q2 Revenues Amid Travel Demand Surge
United Airlines (UAL) shares soared higher in pre-market trading after the carrier forecast record second quarter revenues amid what CEO Scott Kirby called the strongest domestic travel boom in more than three decades.
United's loss for the three months ending in March was pegged at $4.24 per share, down from $7.50 per share loss over the same period last year and just outside the Street's -$4.22 forecast. Revenues also miseed estimates at $7.57 billion, but was still more than double last year's pandemic-era tally.
Looking ahead, however, united said its expects to turn profitable by the end of the quarter, with a 10% operating margin, even in the face of surging fuel costs.
"The demand environment is the strongest it's been in my 30 years in the industry – and United and its customers will benefit more than any other airline," Kirby said. "We're now seeing clear evidence that the second quarter will be an historic inflection point for our business. It leaves me more optimistic than ever about United's future."
United Airlines shares were marked 7.4% higher in pre-market trading to indicate an opening bell price of $49.95 each.
4. -- AT&T Earnings In Focus After $43 Billion Media Merger With Discovery
AT&T (T) shares edged higher in pre-market trading ahead of the group's first quarter earnings report, and the first investor update since spinning off its media division into a merger with Discovery Communications earlier this year.
AT&T, which is now trading as a so-called 'pure play' telecoms group, is expected to earn 59 cents per share on revenues of just over $29.5 billion. However, with HBO Max now trading under the WarnerBrothers Discovery umbrella, investors will now focus on growth rates in the group's wireless and broadband divisions.
AT&T said last month it sees low single-digit revenue growth in 2023, with adjusted earnings in the region of $2.50 to $2.60 per share, or around $44 billion.
The group also reiterated its plan to pay an "attractive" annual dividend of around $8 billion after the close of the WarnerMedia/Discovery deal, a figure that represents a payout ratio of around 40% against its free cash flow forecast of $20 billion.
A&T shares were marked 0.77% higher in pre-market trading to indicate an opening bell price of $19.58 each.
5. -- Netflix Shares Extend Slump As Ackman Dumps $1.1 Billion Stake
Netflix (NFLX )shares extended their declines in pre-market trading, following the stock's biggest single-day decline in early two decades, after billionaire investors Bill Ackman dumped his short-lived stake in the online streaming group.
Ackman, who began amassing shares in late January following Netflix's disappointing fourth quarter earnings, said late Wednesday that he's liquidated his entire $1.1 billion position, and is taking a $400 million loss, following the group's revelation that it had shed 200,000 subscribers over the the first three months of the year and expects to lose another 2 million by the end of the second quarter.
"While Netflix's business is fundamentally simple to understand, in light of recent events, we have lost confidence in our ability to predict the company's future prospects with a sufficient degree of certainty," Ackman wrote to his Pershing Square Capital investors.
"One of our learnings from past mistakes is to act promptly when we discover new information about an investment that is inconsistent with our original thesis," he added. "That is why we did so here."
Netflix shares were marked 0.66% lower in pre-market trading to indicate an opening bell price of $224.70 each., a move that pegs its market value at just under $100 billion.
