5 Things You Need To Know In Financial Markets

5 Things You Need To Know In Financial Markets

 

  1. China’s Economy Grows 6.4%, Dampening Slowdown Concerns

 

China released a deluge of better-than-expected economic data overnight, easing concerns over the slowdown in the world’s second-largest economy.

 

The gross domestic product grew 6.4% in the first quarter, surprising economists who had forecast a slowdown to 6.3%.

 

Industrial production and retail sales also increased more than expected in March, showing economic strength even as the U.S. and China forge ahead on negotiations to reach a definitive trade agreement.

 

In reaction to the news, prices on safe-haven sovereign bonds fell, pushing yields on the U.S. 10-year Treasury and the comparable German bund to one-month highs.

 

Analysts did warn however that it was too soon to predict a sustainable turnaround, suggesting that Beijing would need to provide further fiscal stimulus to support growth.

 

  1. IBM, Netflix Provide Sour Note In Earnings Season

 

Tech earnings released after the prior session’s close were set to dampen investor sentiment on Wednesday as the first-quarter reporting season stays on track to see the first decline in quarterly profit from S&P 500 firms since 2016.

 

IBM (NYSE: IBM) shares fell 2.6% in premarket trade after the computer giant reported a bigger-than-expected decline in revenue, casting a shadow over its cloud-based turnaround strategy.

 

Netflix (NASDAQ: NFLX) also dampened spirits after its forecast for second-quarter earnings missed analysts’ expectations. Shares were off 1.2%.

 

Adding to the earnings parade, the financial sector will remain in focus with Morgan Stanley (NYSE:MS) and US Bancorp (NYSE:USB) reporting ahead of the open.

 

  1. U.S. Futures Get Boost From China

 

Outside of earnings, U.S. futures pointed to a higher open as the positive economic data from China boosted risk sentiment. At 5:32 AM ET (9:32 GMT), the blue-chip Dow futures gained 22 points, or 0.1%, S&P 500 futures traded up 5 points, or 0.2%, while the Nasdaq 100 futures advanced 18 points, or 0.2%.

 

With U.S.-Sino negotiations in the background, economic data on U.S. trade figures will deserve attention when released at 8:30 AM ET (12:30 GMT). On average, economists expect that the U.S. trade deficit widened to $53.5 billion in February, according to forecasts compiled by Investing.com.

 

Also on the calendar, with the Federal Reserve expected to keep interest rates on hold for the rest of 2019, markets will keep an eye on policymakers as both St. Louis Fed president James Bullard and Philadelphia Fed chief Patrick Harker are scheduled to speak on monetary policy and the economic outlook later on Wednesday.

 

Also on the radar, Pinterest (NYSE:PINS) and Zoom (NASDAQ:ZM) are expected to price their public offering after the close ahead of their stock market debut on Thursday.

 

  1. Qualcomm Jumps On Settlement With Apple, Intel Receives A Boost

 

Shares of Qualcomm (NASDAQ:QCOM) soared 6% in premarket trade Wednesday after it reached a surprise settlement with Apple (NASDAQ:AAPL) that will force the iPhone to once again use the company’s modem chips.

 

Intel (NASDAQ:INTC) , that had been the sole supplier of chips for Apple’s smartphone, announced hours later that it would exit the 5G smartphone modem business. Markets appeared to applaud the decision to throw in the towel on the multibillion-dollar effort to break into the market with shares up 2.6%.

 

  1. Oil Prices Get China Boost Ahead Of Expected Crude Inventory Draw

 

Oil traded higher on Wednesday as the upbeat Chinese data bode well for crude demand and attention shifted to official U.S. government data on inventories.

 

U.S. crude oil futures gained 42 cents, or 0.7%, to $64.47 by 5:36 AM ET (9:36 GMT), while Brent oil rose 39 cents, or 0.5%, to $72.11.

 

The U.S. Energy Information Administration will release weekly data on U.S. crude oil inventories at 10:30 AM ET (14:30 GMT) amid expectations for a draw of 1.2 million barrels, in what would be the first decline in four weeks.

 

The American Petroleum Institute data released Tuesday – although not perfectly correlated with the EIA’s report – showed weekly crude stockpiles fell by 3.1 million barrels last week.

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