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J.P.Morgan upgrades HP, downgrades Dell
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Futures up: Dow 0.05%, S&P 0.08%, Nasdaq 0.01%
(Updates prices throughout, adds comments)
By Sruthi Shankar and Ankika Biswas
April 17 (Reuters) - U.S. stock index futures were flat
on Monday as investors awaited more bank earnings and views from
Federal Reserve policymakers that could shape expectations
around when the central bank will pause its monetary policy
tightening.
Wall Street closed lower on Friday after mixed economic data
appeared to affirm another Fed interest rate hike in May,
dampening investor enthusiasm after a series of big U.S. bank
earnings launched the first-quarter reporting season.
While banking heavyweights including JP Morgan Chase & Co reaped windfalls from higher interest payments, focus
will be on smaller banks that were at the center of the banking
turmoil last month as well as forecast from companies amid
worries of a recession.
"So far, numbers seen have been encouraging and have soothed
fears around bank profitability. But things are going to get
more difficult going forward," Stuart Cole, chief macro
economist at Equiti Capital, said.
"For regional banks, profitability will suffer as they are
forced to focus on ensuring adequate liquidity rather than
lending, while the larger banks are facing more difficult times
ahead amid signs of a slowing economy."
Other U.S. banks including Goldman Sachs Group Inc ,
Bank of America Corp , Morgan Stanley will report
through the week, while financial company Charles Schwab Corp is reporting before the opening bell on Monday.
Analysts expect profits at S&P 500 companies to have
declined 4.8% in the first quarter of 2023 from the year-earlier
period, according to Refinitiv data, a slight improvement from
last week's forecast of a 5.2% decline.
The S&P 500 and the blue-chip Dow are trading
near two-month highs, having recovered from March's selloff on
the banking crisis and fears about the Fed staying on a hawkish
course for longer.
The U.S. central bank is widely seen raising rates by a
quarter percentage point to the 5.00%-5.25% range next month,
but recent economic data signaling a slowing U.S. economy have
intensified debate over whether it will be the last in this
cycle.
Traders' bets of a 25-basis point hike in May have risen to
nearly 90% from 78% last week, according to CME Group's Fedwatch
tool.
U.S. central bank officials including New York Fed President
John Williams and Cleveland Fed President Loretta Mester are
scheduled to speak later this week.
A report at 8:30 a.m. ET (1230 GMT) is expected to show
business conditions in New York state improved in April after
slumping in the previous month.
At 6:52 a.m. ET, Dow e-minis were up 18 points, or
0.05%, S&P 500 e-minis were up 3.25 points, or 0.08%,
and Nasdaq 100 e-minis were up 1.5 points, or 0.01%.
Alphabet Inc dropped 3.3% among major growth
stocks in premarket trading following a report that Samsung was
considering replacing Google with Microsoft Corp's Bing
as the default search engine on its devices.
Prometheus Biosciences Inc rallied 69.9% after
Merck & Co said it will buy the biotech company for
about $10.8 billion.
Dell Technologies Inc slipped 2.1% as J.P.Morgan
downgraded the PC maker's stock to "neutral", while HP Inc gained 2.3% after the brokerage upgraded its stock to
"overweight".
(Reporting by Sruthi Shankar and Ankika Biswas in Bengaluru;
Editing by Shounak Dasgupta)
