US stock futures climb

Bloomberg

US equity futures advanced as investors assessed the outlook for corporate earnings and global growth amid Europe’s deepening energy crisis. The dollar falls against all its group of 10 peers.
Contracts on the Nasdaq 100 and S&P 500 climbed 0.9% after early-week gains unravelled on Apple Inc’s plans to slow hiring to brace for a potential economic downturn. The Stoxx Europe 600 traded little changed after erasing an earlier loss.
Signs that high inflation and monetary tightening are squeezing consumers and employment could feed into worries that an equity revival since mid-June is merely brief. Corporate updates such as Apple’s are helping markets to calibrate the risk of recession. Netflix, Johnson & Johnson and Lockheed Martin headline
another busy day for earnings.
Investor allocation to stocks plunged to levels last seen in October 2008 while exposure to cash surged to the highest since 2001, according to Bank of America Corp.’s monthly fund manager survey.
Meanwhile, the euro rose to its highest level in about two weeks after Bloomberg News reported the European Central Bank may consider raising interest rates on Thursday by double the quarter-point outlined previously to counter worsening inflation.
German bunds fall, while benchmark Treasuries traded little changed after paring gains following the report.
Markets are pricing in about 38 basis points of tightening on Thursday, when the ECB is expected to raise rates for the first time in more than a decade. That reflects about a 50/50 chance of a 50-basis point increase. An outsized hike would put the ECB more in line with global peers moving up their policy rates at warp speed.
European stocks could slump another 10% if Russia cuts off gas to the region, triggering a recession, according to Citigroup Inc. strategists. A halt of Russian gas supplies could potentially reduce the euro area’s gross domestic product by about 1%, which would imply a 10% contraction in
the European earnings-per-share over the next 12 months,
according to Citi.
Oil slipped but held above $100 a barrel after posting the biggest one-day advance since May, aided by a tightening market and a cooling in dollar gains.
The ECB is under pressure to subdue inflation, but the potential for a Russian gas shutdown could plunge Europe into recession. The European Union is preparing to tell members to cut gas consumption “immediately” to preserve supplies for winter, according to a report.