Stock Futures Rise Ahead of Big Earnings Day
January 20 2021 - 8:10AM
Dow Jones News
By William Horner
U.S. stock futures gained ahead of a busy day of earnings
reports and the inauguration of Joe Biden as the 46th
president.
Futures tied to the S&P 500 rose 0.4% Wednesday, while
contracts linked to the tech-heavy Nasdaq-100 gained 0.8%. Dow
Jones Industrial Average futures were up 0.1%.
Investors were parsing a slate of earnings reports from
UnitedHealth, Procter & Gamble and U.S. Bancorp. Earnings from
Morgan Stanley are due before the opening bell while United
Airlines will release its earnings just after markets close.
Stocks have begun the week on an upbeat note, with all three
major indexes hovering just below their record highs. Investors
remain optimistic that fiscal stimulus is supporting businesses
through the damage wrought by the Covid-19 pandemic.
That will put pressure on companies to deliver during this
earnings season and meet the market's expectations, said Brian
O'Reilly, head of market strategy at Mediolanum Investment
Funds.
"Any company that is likely to miss or modestly disappoint on
earnings will be punished quite heavily," said Mr. O'Reilly. "A lot
of optimism has already been priced in and typically you don't get
too much room for maneuver when a stock is at a historic high."
Ahead of the opening bell, shares of Netflix rose over 14% after
the streaming company said it had topped 200 million
subscribers.
Procter & Gamble rose 2% after the consumer goods company
said sales jumped in the fourth quarter.
Chinese internet giant Alibaba jumped 8.5% in Hong Kong after
the company's embattled owner, Jack Ma, made his first public
appearance in three months, ending concerns about his
whereabouts.
As earnings reports pick up, focus is likely to center on
sectors most exposed to the U.S. economy, such as banks and energy
companies, and those which have suffered the most during the
pandemic, such as leisure and hospitality, said Hugh Gimber, a
strategist at J.P. Morgan Asset Management.
"The most interesting thing will be how much leveling-off do we
see, how much are last year's laggards able to catch up," he
said.
The inauguration of Joe Biden as president is scheduled to begin
at midday ET amid tight security in the capital. Mr. Biden has laid
out plans for a $1.9 trillion Covid-19 relief package to help
Americans get through the economic shock of the pandemic and direct
money into testing and vaccine distribution.
In commodity markets, Brent crude, the international benchmark
for oil, rose 0.8% to $56.38 a barrel. Gold prices rose 0.4% to
$1,848 a troy ounce.
Overseas, the Stoxx Europe 600 index rose 0.5%. Shares of
Pearson rose nearly 7% after the British education publisher
reported growth in sales, in part due to the increase in online
learning during the pandemic.
In Asia, stocks indexes were mixed. The Nikkei 225 ended the day
down 0.4%, while the Shanghai Composite Index rose 0.5%.
In Hong Kong, the Hang Seng Index rose 1.1% to hit a 20-month
high, with stocks buoyed in recent days by hefty inflows from
mainland China.
Write to William Horner at william.horner@wsj.com
(END) Dow Jones Newswires
January 20, 2021 07:55 ET (12:55 GMT)
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