Stock Futures Pop on Earnings, Rebound in Tech

Inflation angst continues to grip Wall Street

Deputy Editor
May 18, 2021 at 9:00 AM
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Despite earnings season winding down, another round of upbeat quarterly reports is giving stock futures a much needed bump. Futures on the Dow Jones Industrial Average (DJI) were up around 40 points, after a stellar first-quarter beat from blue-chip component Home Depot (HD) and other notable names. Elsewhere, S&P 500 Index (SPX) and Nasdaq-100 Index (NDX) futures are firmly in the black, boosted by a rebound in major tech stocks, which dragged the market down in the previous session. Inflation angst has weighed on the sector of late, but looking ahead, tomorrow's Federal Reserve meeting minutes could shed some light on the thinking of policymakers regarding the matter.

Continue reading for more on today's market, including:

  • Despite a dismal start 2021, TSLA could stage a comeback.
  • Options bulls have been targeting Alibaba stock.
  • Plus, Macy's raises its full-year forecast; HD pops on top- and bottom-line beats; and one mega retailer's first-quarter win.

Futures Chart May 18

5 Things You Need to Know Today

  1. The Cboe Options Exchange (CBOE) saw more than 1.3 million call contracts traded on Monday, and 742,463 put contracts. The single-session equity put/call ratio rose to 0.55 and the 21-day moving average stayed at 0.51.
  2. Macy's Inc (NYSE:M) is up 5.9% before the open, after the company entered the earnings confessional, reporting first-quarter earnings and revenue that beat Wall Street's forecasts. In addition, Macy's reported a 60% pop in comparable-store sales, all leading to a raised full-year forecast. Year-over-year, M is up 70.3%.
  3. Home improvement retailer Home Depot Inc (NYSE:HD) also reported first-quarter top- and bottom-line beats. The company chimed in with earnings of $3.86 on revenue of $37.5 billion, though it did not release an outlook for fiscal 2021. A 31% rise in comparable-store sales was also above expectations, and today's 2.2% premarket pop is adding to the equity's 20.5% 2021 lead.
  4. The shares of Walmart Inc (NASDAQ:WMT) are up 3.7% in electronic trading, after the company raised its second-quarter and full-year outlook in response to an upbeat first-quarter. Walmart reported earnings and revenue that beat analysts' projects, as well as a jump in U.S. comparable-store sales, driven by grocery and e-commerce growth. Today's positive price action should help WMT work its way back toward its year-to-date breakeven mark, as the security is down 3.7% this year.
  5. Today is relatively quiet, though investors still have the latest round of building permits and housing starts data to look forward to.

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European Markets Rise on Easing Inflation Fears

Asian markets were higher on Tuesday, as stocks in Taiwan registered outsized gains. Meanwhile, fresh data showed Japan’s economy shrank at an annualized rate of 5.1% from January to March, while its gross domestic product (GDP) missed analysts’ expectations with a 1.3% quarter-on-quarter drop. Nonetheless, Japan’s Nikkei led the gainers with a 2.1% pop, followed by Hong Kong’s Hang Seng, which added 1.4%. Elsewhere, South Korea’s Kospi rose 1.2%, and China’s Shanghai Composite was 0.3% higher.

European markets are higher as well, as investor sentiment turns positive amid easing inflation fears. As far as economic data, the euro zone GDP registered an anticipated 0.6% drop in the first quarter, while employment fell 0.3%. In other news, traders are also keeping an eye on corporate earnings reports from Engie, Imperial Brands, and Vodafone. In response, London’s FTSE 100 was last seen up 0.4%, the German DAX is up 0.2%, and France’s CAC 40 has added 0.1%.

 

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