Eli Lilly earnings, Toyota lifts annual guidance - what's moving markets

Investing.com -- Eli Lilly is due to headline a slew of quarterly returns, with the performance of its all-important diabetes drug in focus. Toyota (NYSE:TM) hikes its full-year profit outlook, sending U.S.-listed shares in the Japanese carmaker higher in premarket trading. Chinese equities gain as the country's top market regulator offers new support measures.

1. U.S. futures mixed

U.S. stock futures traded around both sides of the flatline on Tuesday, with investors gearing up for a fresh batch of corporate results.

By 05:14 ET (10:14 GMT), the S&P 500 futures contract was mostly unchanged, Nasdaq 100 futures had added 28 points or 0.2%, and Dow futures had slipped by 72 points or 0.2%.

The main averages in Wall Street ended the prior session in the red, dragged down by fresh interest rate commentary from Federal Reserve Chair Jerome Powell. In an interview with CBS aired on Sunday, Powell suggested that recently strong economic data gave the Fed more time to wait before starting to bring borrowing costs down from more than two-decade highs.

The statement further tempered waning hopes for an imminent cut, placing upward pressure on U.S. Treasury yields and weighing on equities. Yields tend to move inversely to prices.

2. Eli Lilly earnings

Traders are eyeing a busy week of corporate earnings, which will be highlighted on Tuesday by results from Eli Lilly (NYSE:LLY).

The U.S. drugmaker (NYSE:LLY) has reported fourth-quarter revenue that topped estimates thanks in large part to soaring demand for its weekly diabetes injection, sending shares higher in premarket trading.

Lilly's blockbuster treatment -- branded as Mounjaro -- is in a race with a rival version from Denmark's Novo Nordisk (NYSE:NVO) to secure dominance in a booming market for weight-loss medications that is estimated to be worth $80 billion a year by the end of the decade.

Worldwide revenue from Mounjaro, which was also approved for weight loss in the U.S. under the brand name Zepbound, surged to $2.2 billion in the three months ended on Dec. 31, above projections of $1.8B. In the corresponding period in 2022, sales of the treatment had registered $279.2 million. Much of the fourth-quarter total stemmed from the U.S., where higher prices, rising demand, and a favorable one-time change in rebates and discounts drove domestic revenue up to $2.11B. Group-wide revenue spiked by 28% to $9.35B, well above an anticipated $8.96B.

Elsewhere on the earnings calendar, biotech group Amgen (NASDAQ:AMGN), drug manufacturer Gilead Sciences (NASDAQ:GILD), carmaker Ford Motor (NYSE:F), and burrito chain Chipotle Mexican Grill (NYSE:CMG) are due to report after the bell on Tuesday.

3. Toyota lifts full-year income outlook

Toyota has raised its annual profit guidance after solid sales of its higher-margin and hybrid vehicles partly drove a third-quarter earnings beat.

The world's best-selling automaker said it now expects income for the year ending in March to come in at 4.9 trillion yen, up from previous projections of 4.5 trillion yen. Analysts had seen the forecast at 4.6 trillion yen, according to LSEG data cited by Reuters.

Hybrid car sales spiked 46% in the three months ended on Dec. 31. Demand growth for the Japanese firm's hybrids -- which include the popular Prius model -- was especially notable in the U.S., where more cost-conscious buyers are opting to avoid elevated electric vehicle prices.

Buoyed as well by a weaker yen, Toyota's operating profit of 1.68 trillion yen in the third quarter topped expectations.

However, Toyota cut its annual vehicle sales target following the suspension of shipments at its Daihatsu Motor unit due to an ongoing scandal around product certification test procedures.

4. Chinese stocks jump after market regulator offers support

The China Securities Regulatory Commission has said it will guide more local funds and asset managers to buy into the domestic market, while also instructing local firms to repurchase more shares.

Chinese equities, which were the worst performers in Asia throughout 2023 and have endured little relief so far this year, gained on Tuesday.

Recent media reports also said that China was tightening its regulatory grip on volatile movements in stock markets, and had instructed major fund managers to block customers from shorting local shares.

But it remains to be seen whether the measures can spur a sustained recovery in Chinese stocks. Concerns over slowing economic growth in the country have been a major catalyst of a rout in domestic equities, and have largely offset monetary stimulus measures from Beijing.

5. Oil prices choppy

Oil prices were volatile on Tuesday, as traders gauged geopolitical tensions and fading bets that the Federal Reserve will unveil early interest rate cuts.

Market participants are closely monitoring if U.S. Secretary of State Antony Blinken's trip to the Middle East can result in a truce in the war between Israel and Hamas. The U.S. has also been continuing its campaign against Yemen-based Houthis, who have carried out attacks on shipping vessels in response to the Israel-Hamas conflict. 

Meanwhile, Reuters reported that analysts have flagged concerns that an extended period of restrictive Fed policy could weigh on activity in the U.S., the world's top crude consumer. Sluggish growth in top oil importer China has also negatively impacted sentiment, Reuters added.

Brent oil futures expiring in April had fallen 0.1% to $77.89 a barrel, while West Texas Intermediate crude futures dipped 0.2% to $72.68 per barrel by 05:14 ET.