Opening Bell: Futures Lag As Facebook Beat Fails To Eclipse Tech Probe Worries

Key Events

Futures on the S&P 500, Dow and NASDAQ 100 posted a mixed picture this morning, with tech contracts flashing red and ignoring a key earnings beat by Facebook (NASDAQ:FB) amid broader U.S. antitrust probe worries. For its part, the social media giant shrugged off ongoing regulatory headaches as well as news of a hefty $5bn fine from the Federal Trade Commission, outstripping both revenue and earnings forecasts on Wednesday.

The STOXX 600 advanced for a fifth consecutive session with an extended rally in tech and automobile makers shares amid a much-anticipated ECB monetary policy meeting. The central bank kept its main deposit rate on hold but laid the groundwork for more policy accommodation in the months to come this morning. Investors will also monitor President Mario Draghi's words to gauge their possible impact on next week's interest rate decision from the Fed, as policymakers around the globe fine-tune their policy moves with ongoing growth concerns.

FB shares continued to climb in the pre-market—technically, the stock may have completed a falling flag, bullish in an uptrend—while Ford (NYSE:F) and Tesla (NASDAQ:TSLA) stocks rebounded after tumbling on disappointing earnings results from the two auto heavyweights.

In the earlier Asian session, China’s Shanghai Composite gained 0.48% while South Korea’s KOSPI bucked a positive regional trend (-0.38%).

Global Financial Affairs

Yesterday, U.S. equities climbed for a third consecutive day, hitting fresh all-time highs as chip stocks led a charge powered by earnings-driven growth hopes.

Investors seemed to turn selective, temporarily dismissing the new Justice Department's antitrust probe into big tech names. They may consider the investigation mostly a cosmetic move to reassure the public interest is protected—though today's slide in NASDAQ futures suggests the issue may indeed still be preying on their minds.

The S&P 500 posted a new record high after United Parcel Service (NYSE:UPS) posted an earnings and revenue beat as well as strong forward guidance. Similarly, the NASDAQ Composite hit a fresh record after Texas Instruments (NASDAQ:TXN) beat analysts' forecasts on both earnings and revenue. On the opposite side of the spectrum, Boeing's (NYSE:BA) and Caterpillar's (NYSE:CAT) dismal earnings readings dragged the Dow Jones Industrial Average lower.

Treasurys advanced for a second day, pushing yields on 10-year notes to the lows of the month. Technically, rates found resistance below the 50 DMA as they range in what may turn out to be an H&S bottom.

The euro slid for a fifth consecutive session as traders braced for more stimulus measures from European policymakers. Technically, the single currency deepened the penetration of a H&S top downside breakout and is flirting with the lowest levels in more than two years.

The Australian dollar dropped for the fifth straight session, with the country’s benchmark bond yields touching an all-time low after Reserve Bank Governor Philip Lowe said he was prepared to cut interest rates again if needed. Technically, the AUD neared the bottom of a rising channel, offering a potential buying opportunity.

Crude rebounded despite the fact that conflicting drivers continue to muddle the market outlook. The demand trajectory remains subdued despite Iran sanctions and the Mideast country's military standoffs with the U.S. and the U.K.. Technically, oil has been trading according to a down-sloping H&S top. It's interesting to note that ongoing jitters in fuel demand clash with the equity market's prolonged bullish narrative.

Up Ahead

• Amazon (NASDAQ:AMZN) reports its corporate results after market close on Thursday, with some analysts pointing out slowing revenue growth may lead to some volatility in the stock.
• Twitter (NYSE:TWTR) unveils earnings before market open on Friday, with analysts expecting the social media company to show continued growth momentum in the second quarter.
• Alphabet (NASDAQ:GOOGL), Unilever (LON:ULVR) and McDonald’s (NYSE:MCD) also report this week.

Market Moves

Stocks

• The Shanghai Composite Index climbed 0.5%, the highest in more than a week.
• The MSCI Emerging Market Index gained 0.2%.

Currencies

• The euro dropped 0.1% to $1.1133, reaching the weakest in eight weeks on its fifth consecutive decline.
• The British pound was unchanged at $1.2484.
• The onshore yuan fell less than 0.05% to 6.875 per dollar.
• The Japanese yen rose 0.1% to 108.09 per dollar, the largest advance in a week.

Bonds

• The yield on 10-year Treasurys fell one basis point to 2.03%, the lowest in a week.
• The yield on 2-year Treasurys decreased one basis point to 1.81%.
• Germany’s 10-year yield dropped one basis point to -0.39%, reaching the lowest in three weeks on its seventh straight decline.
• Britain’s 10-year yield slid one basis point to 0.665%.
• Japan’s 10-year yield declined one basis point to -0.153%, reaching the lowest in almost three weeks on its ninth straight decline and the biggest fall in a week.

Commodities

• West Texas Intermediate crude rose 0.5% to $56.14 a barrel.
• Iron ore climbed 0.7% to $111.92 per metric ton.
• Gold slipped less than 0.05% to $1,425.49 an ounce.