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**Futures Rally Fizzles As Banking Fears Resurface**

Futures Rally Fizzles As Banking Fears Resurface

US index futures are fractionally higher, led by tech, however continued turmoil surrounding First Republic Bank which tumbled as much as 30% this morning after losing half its value yesterday, has sapped much of the earlier optimism and gains. Yesterday was the SPX’s worst day in a month and was April’s second move that exceeded 1%, in either direction. As of 8:00am ET, S&P futures were up 0.1%, while Nasdaq futures gained 0.8%, but both were well of their highs. Google parent Alphabet and Microsoft Corp. both beat first-quarter earnings expectations in results published after the market close. Microsoft gained in the premarket Wednesday, while Alphabet reversed an advance to move into the red. Meta Platforms is due to report after the bell today.

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Pre-mkt MSFT +7.4%, AMZN +3.7%, NVDA +2.1%, META +2.0%, GOOGL, +0.5%, AAPL +0.4%. PACW seemingly gives more evidence that FRC is idiosyncratic. V is +0.9% pre-mkt after posting earnings; the more impactful news may be that the company states that the consumer remains in good shape amid decreasing inflation. Here are some other notable premarket movers:

- Boeing shares jump 4.1% in premarket trading, after the planemaker’s first-quarter revenue and cash flow both beat expectations. Shares off some Boeing suppliers also rose premarket. Spirit AeroSystems up 2.5%, Arconic up 1%, Howmet up 1.9%.

- Microsoft jumps as much as 7.7% after the software company’s third-quarter results beat expectations. Analysts highlighted strength in the company’s Azure cloud business and were optimistic about the overall resiliency of the business, leading at least 16 of them to raise their price target on the stock.

- Alphabet rises as much as 1.9% after the Google parent reported first-quarter results that beat expectations. Analysts noted strength in the company’s search business, as well as positive momentum in cloud. This coupled with strong results from fellow tech juggernaut Microsoft eased concerns that tech shares’ year-to-date rally is overdone.

- Midsize US banks, including First Republic (FRC US), rally following an update from peer PacWest which showed that deposits stabilized toward the end of March and rose in April, calming worries over the lender’s health.

- Enphase Energy shares plummet as much as 16%, on track for their worst day since June 2020, with analysts cutting their price targets on the solar equipment maker after its second-quarter revenue guidance missed expectations due to weakness in its US market and higher interest rates. Brokers say that Enphase’s first quarter performance was overall strong, and are positive regarding its prospects for the longer-term.

- Getty falls as much as 6.7% after the media firm rebuffed a takeover bid of almost $4 billion from Trillium, saying the activist investor hasn’t provided any evidence that its proposal, valuing the shares at nearly double the pre-offer price, is “sufficiently credible.”

- IonQ gains 3.6% after Morgan Stanley initiates coverage with an equal-weight recommendation, saying the quantum computing company is an early leader in the space, though the technology risk is high as quantum advantage is still unproven.

While layoffs dominate headlines, the US is still net adding jobs this year, from a strong starting point, 3.5% unemployment. The yield curve is steeper with USD lower; cmdtys staging a relief rally.

Today, the macro data focus is on durable/cap goods, inventories, and mtge applications. There may be a vote on McCarthy’s debt ceiling bill in the House, though this bill will fail in the Senate but is seeing a stronger negotiating move. Debt ceiling fears will continue to permeate markets near-term

“The question is to what extent central banks and regulators can contain market sentiment and make clear to investors they need to keep a cool head, to give depositors confidence that there is no need to run to other banks,” said Tatjana Puhan, deputy chief investment officer at Tobam SAS. “So far the Fed has been very clear that they will continue to hike rates as long as needed to contain inflation.”

European stocks fall to their lowest level in two weeks as investors continue to fret over the health of the global banking system. Software producer Dassault Systemes sank more than 8% after missing revenue estimates. The Stoxx 600 is down 0.8% with industrials, healthcare and tech the worst performing sectors. Bank stocks were leading declines at one stage but recovered after a positive premarket open for First Republic. Dutch chip-tool maker ASM International slumped more than 10% after offering a tepid outlook for the rest of the y…

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