Opening Bell: U.S. Futures Slide; Chinese Assets Tumble; Oil Jumps

Key Events

Futures on the S&P 500, Dow and NASDAQ 100 edged lower this morning, after Asian stocks swung between gains and losses at the end of the extended Easter holiday weekend.

SPX contracts, however, seemed to have found support, bouncing off the 200-hour MA at around 9PM EDT.

In the Asian session, Japan’s Nikkei 225 eked out a gain (+0.14%), with big names like Softbank Group (T:9984), Fanuc (T:6954) and Fast Retailing (T:9983) weighing on the index. Seoul’s KOSPI closed mostly flat (+0.02%), with chipmaker SK Hynix (KS:000660) (-0.25%) dragging prices lower.

China’s Shanghai Composite (-1.7%) underperformed on speculation the local government will wind down stimulus. Technically, the price met resistance at the Apr. 8 highs, setting the stage for a small double top and the potential for a larger H&S top.

Investors shed Chinese bonds alongside equities, pushing the yield on 10-year notes higher. Technically, the price hit a pause around the 200 DMA, forming a pennant continuation pattern, following the completion of a double-bottom early in the month. The RSI, however, sets up a potential H&S top, as the MACD tops out.

Markets in Hong Kong and Australia remained closed for the holiday.

Global Financial Affairs

On Thursday, U.S. stocks wrapped up the holiday-shortened week slightly lower, giving up a three-week rally despite some upbeat corporate earnings results and better-than-expected manufacturing data in China, which had boosted sentiment across global markets earlier in the week.

With U.S. equities still nearing all-time highs, traders will have to determine whether the recent shift, by global central banks, to a dovish stance will be enough to compensate for an overall expectation of contracting earnings, amid some ongoing red flags to watch and a lack of forceful catalysts.

In commodities, oil gapped up, jumping more than 2% after the U.S. said it plans to stop Iran oil waivers. The leap prompted a breakaway upside gap, whose bullishness is compounded by the completion a falling flag. However, that doesn’t mean the WTI price won’t retest the dual support of the gap’s bottom and flag’s top. As of the time of writing, the price has been trendless for the fifth consecutive hour.

Up Ahead

• The Bank of Japan, Bank of Canada, Bank of Russia, Sweden’s Riksbank and Bank of Indonesia all set monetary policy this week.
• Germany’s IFO data is released on Wednesday.
• Japan’s Prime Minister Shinzo Abe meets leaders from the European Union on Thursday before flying to the U.S. for a summit with President Donald Trump.
• The initial print of first-quarter U.S. GDP will be closely watched on Friday for clues as to how the economy responded to the government shutdown and to the fourth-quarter market rout.

Earnings

• Twitter (NYSE:TWTR) is scheduled to post earnings before market open on Tuesday, with expectations of $0.06$ EPS, from $0.09 in the same quarter last year. The social media company may soon start to reap the benefits of its recent efforts to step up both transparency and user experience standards.
• Microsoft (NASDAQ:MSFT) reports results after market close on Wednesday, with an EPS of $1, from the $0.95 it posted last year.
• Facebook (NASDAQ:FB) is expected to release earnings after market close on Wednesday, with a $1.65 EPS, slightly lower than the $1.69 it posted last year.
• Amazon (NASDAQ:AMZN) is due to report earnings after market close on Thursday, with a $4.61 EPS forecast, from $3.27 last year.
• European bank earnings kick into full gear with reports from Deutsche Bank (DE:DBKGn), UBS (NYSE:UBS), Barclays (LON:BARC), Credit Suisse (SIX:CSGN) and Swedbank (ST:SWEDa).

Market Moves

Stocks

• The MSCI Asia Pacific Index slid 0.1%.
• Japan’s TOPIX rose 0.1%.

Currencies

• The Dollar Index rose less than 0.1%.
• The yen was steady at 111.92 per dollar.
• The euro was flat at $1.1242.
• The offshore yuan fell 0.2% to 6.7127 per dollar.
• The British pound was steady at $1.2996.

Bonds

• The yield on 10-year Treasurys gained one basis point to 2.57%.

Commodities

• West Texas crude surged 2.3% to $65.44 a barrel.