Nasdaq futures jumped on Monday as markets geared up for a busy week of earnings from mega-cap technology companies, against the backdrop of rising hopes for a fiscal package from the Biden administration.
REUTERS: Nasdaq futures jumped on Monday as markets geared up for a busy week of earnings from mega-cap technology firms, while Dow and S&P 500 futures came under pressure from a decline in Merck’s shares after the drugmaker ended its COVID-19 vaccine program.
The so-called “stay-at-home” winners including Microsoft Corp, Facebook Inc and Apple Inc rose between 1.5per cent and 2.9per cent in premarket trading, as investors were optimistic of their earnings reports following upbeat results from Netflix Inc last week.
Microsoft, scheduled to report results on Tuesday, rose 1.5per cent as Wedbush raised its price target on the software maker’s stock on expectations of further growth in its cloud business for 2021.
Tesla Inc rose 1.2per cent ahead of it quarterly results on Wednesday.
“All eyes are on tech as it now has a chance to resume some of the strength that it lost in recent months,” said Thomas Hayes, chairman of Great Hill Capital in New York.
Investors also hoped officials in President Joe Biden’s administration could head off Republican concerns that his US$1.9 trillion pandemic relief proposal was too expensive, even as lawmakers from both parties agreed that getting the COVID-19 vaccine to Americans should be a priority.
“We’re focused on two things this week, whether big-tech can deliver, which we are pretty optimistic about, and whether Congress can move ahead with the stimulus package that the market is anticipating,” Hayes said.
Wall Street’s main indexes touched record highs last week on hopes of a full economic reopening and efficient distribution of vaccines across the country, that is suffering more than 175,000 new cases a day with millions out of work.
Meanwhile, Dow e-minis fell and futures for the S&P 500 traded in a tight range following news that Merck & Co Inc would stop development of its two COVID-19 vaccines citing inferior immune responses. The drugmaker’s shares fell 1per cent.
At 8:20 a.m. ET, Dow e-minis were down 123 points, or 0.4per cent, S&P 500 e-minis were up 5.75 points, or 0.15per cent, and Nasdaq 100 e-minis were up 135.75 points, or 1.02per cent.
With pricey stock market valuations, investors are keeping an eye out for corporate forecasts to justify it, given the expectation of an economic rebound this year. Earnings are expected to rise 23.7per cent this year after falling 14.1per cent in 2020, according to Refinitiv.
Advanced Micro Devices Inc added 1.5per cent after RBC raised its price target on the chipmaker’s shares.
Videogame retailer GameStop Corp surged 48.5per cent, after having already gained about 250per cent since the beginning of 2021. Traders noted that the jump in shares could be short-sellers quickly buying back into the stock to cover potential losses and retail investors piling in to benefit from the surge.
(Reporting by Devik Jain and Shreyashi Sanyal in Bengaluru; Editing by Shounak Dasgupta)