European Shares May Open Higher On Wall Street Rally

(RTTNews) – European stocks may open higher on Friday after Wall Street rallied to its best day since January on the back of robust earnings from big tech companies.

U.S. stock futures were broadly lower as investors react to mixed earnings results released after the closing bell.

Amazon beat earnings expectations in Q1 but signaled that cloud growth would slow further. Intel said gross margins will improve in the second half of the year.

Capital One posted worse-than-feared quarterly profit while Snap’s first quarter revenue missed estimates.

Chevron, Exxon Mobil, Colgate-Palmolive and Newell Brands are among the prominent companies due to report their financial results before the U.S. opening bell later today.

Treasury yields were mixed and the dollar headed for a monthly loss as investors await a report on U.S. personal income and spending, which includes a reading on inflation said to be preferred by the Federal Reserve.

The Japanese yen slumped after the Bank of Japan stood pat on its ultra-easy monetary policy, adding it would conduct a broad-perspective review of its easing measures.

Markets currently price in a 25-bps rate hike by the Fed next week and then a pause.

The European Bank has to decide between a 25-bps hike and 50-bps hike. The Bank of England is also forecast to deliver a rate rise in May.

Asian markets traded mostly higher, and gold was little changed while oil prices were on track for a second weekly drop on recession fears.

U.S. stocks rallied overnight as Facebook parent Meta, Comcast and Honeywell delivered strong first-quarter results and weaker-than-expected GDP data suggested the Fed might end rate hikes in the near term.

U.S. GDP grew 1.1 percent in the first three months of 2023 after expanding by 2.6 percent in the fourth quarter of 2022, the government said in its advance estimate.

The quarterly inflation number within the GDP report came in higher than expected and jobless claims unexpectedly declined in the week ended April 22, underpinning rate hike expectations for next week’s FOMC meeting.

The tech-heavy Nasdaq Composite soared 2.4 percent to log its best single-day gain since March while the Dow climbed 1.6 percent and the S&P 500 added 2 percent to register their biggest gains since January.

European stocks ended a choppy session mostly higher on Thursday as strong earnings updates offset lingering concerns around the U.S. banking sector.

The pan European STOXX 600 gained 0.2 percent. The German DAX finished marginally higher and France’s CAC 40 edged up 0.2 percent while the U.K.’s FTSE 100 eased 0.3 percent.