Stock Futures Point Up With Rate Decision Looming

Barry Adams
04 May, 2022
New York City

Futures of leading U.S. stock indexes point higher opening ahead of the Fed decision this afternoon. 

Futures of the S&P 500 and Nasdaq Composite indexes are up 0.4%. 

Investors are stepping up to add positions citing market oversold conditions ahead of widely anticipated 0.5% interest rate hike this afternoon.  

Investors also digested the latest batch of earnings from CVS, Yum Brands, Starbucks, AMD, Akamai, Airbnb, Uber, Lyft and others. 

Starbucks said U.S. comparable sales rose driven by price increase and higher transactions and suspended its annual earnings estimates on the ongoing lockdown uncertainties in its second largest market China. 

CVS Health Corp reported first quarter profit that beat estimates and cited strong momentum across all business segments. 

The pharmacy retailer lifted its adjusted earnings per share outlook for 2022 to a range between $8.20 and $8.40 from the previous range between $8.10 and $8.30 a share.

In Europe, the DAX index fell 0.2%, and FTSE 100 index and CAC-40 index declined 0.5%. 

The European Union proposed a ban on Russian oil imports and is working to prepare sanctions on Russian military officials accused of war crimes.

Eurozone private sector activities rose to the highest level in seven months in April on the strength in the service sector. The economic activities are roaring back on the easing of pandemic related restrictions. 

The S&P Global composite output index increased to 55.8 in April, the most since September 2021 and the services Purchasing Managers' Index increased to an eight-month high of 57.7 in April from 55.6 in March.

Activities in France picked up at the fastest pace in April since the start of 2018 and in Italy the activities rose for the fifteenth month in a row. 

Volkswagen AG posted higher quarterly profit and said vehicle deliveries are expected to increase between 5% and 10% and said semiconductor supplies are expected to improve in the second-half. 

First quarter earnings surged to 6.56 billion euros or 13.05 euros per share from 3.24 billion euros or 6.45 euros per share in the previous year.

In Asia, markets in Japan were closed for Greenery Day holiday, China for Labor Day, and Indonesia and Malaysia for Eid celebration. 

The benchmark index in Hong Kong fell 1% and in Taiwan gained 0.4%. Market indexes in South Korea, New Zealand, and Singapore closed nearly unchanged. 

Stocks in Mumbai plunged after the Reserve Bank of India announced a rate hike in a surprise move citing acute inflationary pressures. 

The Sensex index declined 1,306.96 or 2.3% to 55,669.03 and the Nifty index fell 391.50 or 2.3% to 16,677.60. 

The Reserve Bank of India increased repo rate 40 basis points to 4.4% and cash reserve ratio by 50 basis points to 4.5% from May 21.