Futures Rise Boosted By China Stimulus Optimism, European Inflation News

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by Tyler Durden
Wednesday, Jan 04, 2023 - 01:03 PM

US futures reversed after Tuesday's slump and gained on Wednesday, although easing off higher levels reached earlier, amid optimism around a boost from a potential recovery in China’s economy (which however was clearly not enough to find a bid below oil which crumbled for a second day), while investors awaited minutes of the Federal Reserve’s latest policy meeting for clues on the path of monetary policy. Nasdaq 100 futures rose 0.5% by 7:30 a.m. ET, while S&P 500 futures rose 0.3% after gaining 0.5% earlier following a burst of European optimism which sent the Estoxx50 2% higher, aided by European inflation data lifting risk appetite. The risk-on mood was also boosted after Chinese authorities said they are planning to usher in further support measures to ease liquidity stress at some of the nation’s too-big-to-fail developers as the property downturn persists. The dollar fell, erasing all of yesterday's sharp gains, while Treasuries continued their "peak inflation is behind us and the Fed will soon stop tightening" ascent and added to Tuesday’s gains with yields richer by at least 6bp following wider rally across core European rates after French CPI unexpectedly slowed in December.

In premarket trading, Tesla gained after yesterday’s 12% slump after Cathie Wood kept buying shares of the electric-vehicle maker. Rivian also rose as analysts were optimistic about the electric-vehicle maker’s production ramp up in a difficult year riddled with supply chain issues. Microsoft fell after UBS downgraded its stock to neutral from buy. Bank stocks were higher putting them on track to gain for a second straight day. In bank news, Ken Griffin’s Citadel hired Blackstone alum Rakesh Kumar as head of equity capital markets at its Surveyor Capital unit. Meanwhile, Swati Bhatia, who ran Goldman Sachs’s direct-to-consumer business, is leaving after less than two years. Here are some other notable premarket movers: