US Equity Futures Troll After Bullish Profits And New Records As Demand Outlook Weighs On Oil

U.S. equity futures near record highs on Friday as investors cheered on bullish corporate earnings, while oil futures fell as concerns grew over demand growth.

Dow Jones futures were up 0.15%, S&P 500 futures were up 0.11% and Nasdaq futures were up 0.1%, as of 5:02 am ET on Friday. The S&P 500 closed at a new all-time high on Thursday after producer price inflation exceeded analysts’ estimates and unemployment benefit claims fell for the third week in a row.

Strong corporate quarterly financial reports have given U.S. equity markets a boost this earnings season, with Disney the latest in its update on Thursday. The entertainment company beat Wall Street expectations for its third quarter with its highest sales and profits since before the pandemic, as its theme parks reopened in the United States and lockdown restrictions elsewhere maintained consumers attached to home streaming. Disney shares have risen more than 5% in pre-market trading.

Oil futures fell on Friday after monthly reports from the International Energy Agency and OPEC raised concerns about growing demand. The IEA lowered its demand forecast for 2021 and predicted a surplus in 2022 as the Delta coronavirus variant continues to spread. While OPEC has kept its demand growth outlook stable, it has raised its stance on non-OPEC supply.

“With the spread of a new strain of COVID-19 around the world, a shadow of doubt now hangs over future growth prospects and therefore the outlook for demand for key commodities, such as oil,” said said Dimitri Zabelin, analyst at DailyFX. “The cumulative effect of the near-restrictive policies of major crude consumers is nonetheless a fundamental headwind.”

Brent crude fell 0.17%, trading at $ 71.19 per barrel, and WTI crude fell to $ 68.91 per barrel, or 0.26% lower.

European markets began to rise on Friday in muted trading, following the mood in the United States. The Frankfurt DAX rose 0.43%, while the London FTSE 100 gained 0.23% and the Euro Stoxx 50 rose 0.2%.

Asian equity markets took a more negative tone as the Delta variant spread continued to weigh on investor sentiment. The Tokyo Nikkei 225 closed 0.14% lower, while the Shanghai Composite lost 0.24% and the Hong Kong Hang Seng index fell 0.59% at the end of the trading day .

COVID concerns continued to arise after two major Chinese ports were partially closed following new cases, seen as likely to renew problems in the global supply chain. Concerns about China’s regulatory pressures also persisted as investors absorbed Beijing’s five-year plan, which promised increased surveillance.

The yield on the 10-year US Treasury bill stood at 1.346%, down 2.1 basis points after Thursday’s employment and inflation data gave mixed signals on the economic recovery , raising new concerns about when and if the Federal Reserve will withdraw its monetary stimulus.