U.S. stock futures rose Tuesday ahead of a string of major American companies reporting earnings and potentially offering fresh insights into how they are coping with the disruption caused by the coronavirus pandemic.
Futures tied to the S&P 500 rose 0.7%, suggesting that U.S. stocks may continue to rally after the opening bell. American tech stocks led the market higher on Monday, sending the Nasdaq Composite up 2.5% to a record, though the broader S&P 500 gauge posted a more muted 0.8% increase.
Tech stocks are likely to remain in focus: shares of IBM rose over 5% in offhours trading after its second-quarter revenue fell less than Wall Street expected, and cloud-computing revenue jumped 30%. Another tech company that investors have favored this year, Snap, is scheduled to report earnings after U.S. markets close.
“Tech names have outperformed very strongly against the market,” said Luc Filip, head of private banking investments at SYZ Private Banking. “We think this will last at least for the next few days until we see the results” for Microsoft and Amazon.com this week, he said.
Investors will also hear from Coca-Cola and Lockheed Martin this morning, and from United Airlines in the late afternoon.
Overseas, the pan-continental Stoxx Europe 600 rose 1.1% Tuesday after European Union leaders struck a historic deal overnight on the terms for a €1.8 trillion ($2.06 trillion) spending plan. The package will center around the bloc’s first-ever issuance of common bonds, and could help deepen the bloc’s economic integration.
“It is an important moment in the history of the European Union, given the size of the package and the fact this will be financed by EU bonds,” said Sébastien Galy, senior macro strategist at Nordea Asset Management. “Such common liabilities for the European Union are unprecedented in size.”
Southern European government debt rallied for a second day after leaders agreed that a €750-billion recovery fund would include grants to weaker economies. The yield on Greece’s benchmark 10-year government bond fell below 1% for the first time since February. Italy’s yield dipped to 1.072%, from 1.089% on Monday.
In European equities, Norwegian digital marketplace operator Adevinta surged 37% after it acquired eBay’s classified-ads business for $9.2 billion. Schibsted, a media company which owns a stake of Adevinta, rose 20.2%.
Gold continued to edge up, reaching its highest level since 2011. It rose 0.5% to $1,826.20 per troy ounce. Investors are buying the metal as a haven asset and to hedge against potential inflation as central banks continue to pump money into the system, according to SYZ’s Mr. Filip.
“It’s almost a no-brainer, let’s buy some gold to hedge when there’s many uncertainties still,” Mr. Filip said. His company currently holds between 4.5% and 5% of its portfolio in gold.
In Asia, most major equity benchmarks ended the day with muted gains. Hong Kong’s Hang Seng Index was among the biggest gainers after it rallied over 2%. Japan’s Nikkei 225 rose 0.7%.
Write to Anna Hirtenstein at anna.hirtenstein@wsj.com
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July 21, 2020 at 05:16PM
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