LDN - Business

Nasdaq futures gain 1% on upbeat Meta forecast, economic data on deck

[April 27, 2023] By Sruthi Shankar and Ankika Biswas

(Reuters) -Nasdaq Futures climbed nearly 1% on Thursday as an upbeat forecast from Meta Platforms lifted social media stocks, while investors digested big-ticket earnings ahead of key economic data.

Meta Platforms Inc jumped 12.1% in premarket trading as it forecast quarterly revenue above estimate, with CEO Mark Zuckerberg saying that Artificial Intelligence was increasing traffic to Facebook and Instagram and boosting ad sales.

Shares of social media platforms Snap Inc and Pinterest Inc rose around 4% each.

Meta is the second best performer among the S&P 500 stocks with a 74% gain so far this year, next only to Nvidia Corp.

Commerce Department data due later in the day is expected to show U.S. gross domestic product increased by 2% in the first quarter on strong consumer spending, while the core personal consumption expenditure for the first quarter is seen rising by 4.7% compared with 4.4% in the previous quarter.

Another set of data is expected to show initial jobless claims rose to 248,000 for the week ended April 22, up from the 245,000 claims filed in the week before.

The economic data will help investors assess the Federal Reserve's policy path, with money market participants already widely expecting another 25-basis-point interest rate hike by the central bank next week, according to CME Group's FedWatch tool.

The decline in first-quarter earnings is estimated to be smaller than analysts had expected at the start of the month, with a host of tech names such as Microsoft Corp and Alphabet reporting upbeat results this week.

Analysts expect first-quarter earnings to drop 3.2% year-over-year for S&P 500 companies versus a 5.1% decline forecast earlier.

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Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., April 17, 2023. REUTERS/Brendan McDermid

Amazon.com Inc and Intel are among the big names set to report after markets close.

At 7:29 a.m. ET, Dow e-minis were up 129 points, or 0.39%, S&P 500 e-minis were up 23 points, or 0.56%, and Nasdaq 100 e-minis were up 122.75 points, or 0.95%.

The U.S. House of Representatives on Wednesday narrowly passed a bill to raise the government's $31.4 trillion debt ceiling that includes sweeping spending cuts over the next decade. The bill is expected to get stalled in the Senate.

Boosting sentiment, Eli Lilly and Co advanced 3.9% on raising its full-year profit forecast, while Merck & Co gained 2% on better-than-expected first-quarter results.

Comcast Corp rose 3.8% after quarterly revenue edged past estimates, helped by sustained demand for its broadband services and higher theme park attendance, while investors await an update on the media giant's plans to replace the head of NBCUniversal.

EBay Inc climbed 3.3% after the e-commerce company forecast current-quarter revenue above projections as it benefits from its strategy of focusing on product categories including sneakers and watches.

(Reporting by Sruthi Shankar and Ankika Biswas in BengaluruEditing by Vinay Dwivedi)

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