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Big Tech and Big Oil, GDP and Jobless Claims, Copper 10k? - What's Moving Markets

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By Geoffrey Smith

Investing.com -- Companies are churning out cash again, with Big Tech and Big Oil both reporting strong quarters. Copper is nearing $10,000 a ton and the 10-year Treasury yield hits a two-week high as the Federal Reserve bats away concerns about inflation. The initial reading of first-quarter U,S. GDP is due, along with weekly jobless claims. And Amazon, Twitter, McDonald’s (NYSE:MCD) and Caterpillar all report earnings, alongside many more. Here’s what you need to know on Thursday, April 29th.

1. Big Tech's big quarter

Big Tech produced more gob-smacking numbers, with both Apple (NASDAQ:AAPL) and Facebook (NASDAQ:FB) comfortably beating expectations with their quarterly results after the close on Wednesday.

Apple’s profit was 42% ahead of expectations, and its revenue 16% ahead, thanks to booming sales of devices to the working-and-learning-from-home cohorts, although it warned that the global chip shortage would hit sales of iPads and Macs in the current quarter. Facebook meanwhile echoed Alphabet (NASDAQ:GOOGL) from a day by reporting a surge in advertising revenue thanks to a full winter of lockdowns that kept advertisers away from non-online channels.

Qualcomm (NASDAQ:QCOM) also reported a very strong outlook for the rest of the year, thanks to strong demand for mobile phones, its key segment.

2. 1Q GDP, jobless claims data due

The U.S. publishes its first estimate of gross domestic product for the first quarter, with growth expected to have accelerated to an annualized 6.1% from 4.3% in the fourth quarter of last year. A weak start to the year due to widespread lockdowns meant that the economy only slowly built up momentum over the quarter.

Weekly jobless claims data, also due at 8:30 AM ET, are expected to show little change from the previous week at 549,000, while continuing claims are expected to have edged down by some 60,000.

Pending home sales data, due at 10 AM, are expected to have rebounded in parallel with new and existing home sales data released over the last week.

.3. Tech earnings set to lift stocks at open

U.S. stocks are set to open higher later, with tech stocks leading the way after the renewed promise of monetary policy staying loose and another evening of bumper earnings from the West Coast.

By 6:30 AM ET (1030 GMT), the Dow Jones futures contract was up 144 points, or 0.4%, while the S&P 500 futures contract was up 0.7%. The Nasdaq 100 futures contract was lifted 0.9%, chiefly by Apple and Facebook, which rose 2.9% and 7.1% respectively. Qualcomm stock was also up 5.6%.

The old economy takes center stage with today’s early releases: Caterpillar (NYSE:CAT), Kraft Heinz (NASDAQ:KHC), Comcast (NASDAQ:CMCSA), Merck, Hershey and Altria (NYSE:MO) report, along with Keurig Dr. Pepper, Northrop Grumman (NYSE:NOC), American Tower (NYSE:AMT), S&P Global (NYSE:SPGI) and Thermo Fisher (NYSE:TMO). Amazon (NASDAQ:AMZN) rounds off the FAAMG earnings season after the bell, with Mastercard (NYSE:MA) and Twitter as the supporting act.

4. Fed pushes bond yields, commodities higher; Copper nears $10k

The 10-year Treasury bond yield rose to its highest in over two weeks as Federal Reserve Chairman Jerome Powell waved away any talk of inflation at his press conference, dismissing the factors behind a near-term rise in annual inflation rates as “transitory”.

Powell stressed once again that, while he expects “more normal economic conditions” later this year, “the economy is a long way from our goals” and “it’s likely to take some time” before they are reached.

Powell’s comments come against the background of surging prices for both industrial and agricultural commodities. Copper futures in London rose to within a whisker of $10,000 a ton overnight, while nickel futures rose another 1% to a 13-month high.

5. Big Oil is back, in Europe at least

Europe’s oil majors returned to the market’s good graces, with Royal Dutch Shell (LON:RDSa), Total and Equinor all reporting big increases in profit for the first quarter, and Shell and Equinor both raising their dividend. The Anglo-Dutch major was also able to pay down some of the debt that it had taken on during last year’s crisis.

For all three, profit has now returned to pre-pandemic levels. Total, however, is the only one of the three that is still returning cash to shareholders at pre-pandemic rates. Shell, which cut its dividend for the first time in 70 years to save cash during the pandemic, also told the FT that it doesn’t plan any further increases in payouts this year.

Crude oil prices meanwhile, advanced to their highest in seven weeks, supported by loose monetary policy and a cheaper dollar, along with an ongoing recovery in demand in most of the world except India. By 6:30 AM ET, U.S. crude futures were up 1.4% at $64.73 a barrel, while Brent was up 1.4% at $67.68 a barrel.

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