5 Things You Need to Know to Start Your Day: Americas

Good morning. The rebound in stocks gathers pace, earnings season kicks into gear and Apple sees iPhone sales in China dive. Here’s what tra [View in browser]( [Bloomberg]( Good morning. The rebound in stocks gathers pace, earnings season kicks into gear and Apple sees iPhone sales in China dive. Here’s what traders are talking about. — [David Goodman]( Want to receive this newsletter in Spanish? [Sign up to get the Five Things: Spanish Edition newsletter](. Stocks Rise [US futures edged higher,]( European stocks rose and the UK’s FTSE 100 index ([finally]() hit a record high as a rebound that took hold on Monday gathered momentum. Treasuries were steady before a flurry of [bond auctions](bbg://news/stories/SCCR4NT0G1KW) that will test investor appetite, starting with a two-year sale today, while a gauge of the dollar was little changed. Citi Optimism Citigroup strategists say the recent rout in global equities [makes them more attractive](, removing market froth and leaving investors to focus on robust corporate earnings. “We would view the recent pullback as a buying opportunity,” the team including Mihir Tirodkar and Beata Manthey wrote in a note. “The current earnings season could re-focus investor attention on solid underlying fundamentals.” Earnings Bonaza Earnings are very much front and center of [investors’ minds]( this week with about 180 companies — representing over 40% of the S&P 500 market value — reporting results. That kicks off in earnest on Tuesday. Pepsi and UPS have already reported better than expected numbers, while Spotify's were more mixed. Firms including Tesla, Visa and GM are set to announce their own figures later today. In Europe, [software firm SAP]( and [drugmaker Novartis]( are both rising after posting their own strong results. Apple’s China Woe There’s also a host of other tech earnings due this week, with Meta, Alphabet and Microsoft all releasing numbers. We have to wait until May for an update from Apple, which is in the midst of a bad year that has seen its stock fall by almost 14%. Sentiment [may have taken another hit on Tuesday]( after data showed iPhone sales in China fell 19% during the first quarter, the worst performance since Covid struck. The weakness is remarkable because the first quarter, when China celebrates the Lunar New Year, is traditionally a period of heightened consumption. US as EM Play Mercer, the investment consultant that counts giant sovereign wealth funds, insurers and pension managers as clients, says smaller investors seeking exposure to emerging markets are [best off doing so by buying shares in US companies](. “If you’re trying to get exposure to the underlying GDP growth, the favorable demographics, and all the long-term favorable things in emerging markets, you get a lot of that by investing in global multinationals,” said Rich Nuzum, executive director and chief investment strategist at the firm. What we’ve been reading This is what’s caught our eye over the past 24 hours. - German rebound drives euro-area activity [to 11-month high](. - Hedge funds[snap up Japan rates traders]( in bet on comeback. - Higher UK borrowing forces gilt supply boost, [complicates tax cut hopes](. - [John Authers](welcomes the long-awaited FTSE 100 record. - Bubble-tea maker [Chabaidao slumps 27%](in HK’s biggest 2024 debut. - A hedge fund billionaire's cash [helped fund]( a 'predatory' lender And finally, here's what Tracy’s interested in this morning “Stop trying to make Fetch happen,” [quipped]( Mean Girls’ Regina George, in response to her friend’s attempts to popularize a new phrase. For bank regulators, the financial equivalent of ‘Fetch’ has to be the emergency lending facility known as the discount window. For years, policymakers have been trying to make ‘Fetch happen’ by destigmatizing banks’ use of the window. The idea is that banks should be willing and able to exchange collateral for emergency cash when needed -- and without fear of the loan setting off a rumor mill of speculation in the market. So it’s with some irony that a different lending facility seems to have surged in popularity in a mere year of existence. The Fed’s Bank Term Funding Program (BTFP) was set up in March 2023, at the height of the banking drama, to give financial institutions a new avenue for emergency funding. Instead of borrowing against collateral at market value, as required at the discount window, the BTFP allows banks to borrow against collateral at par value. For institutions with big mark-to-market losses on their bond portfolios, that was a big deal. For a time, banks could also [arbitrage]( the BTFP for a profit. The Fed’s latest [Financial Stability Report](, which was published last week, highlights how pervasive take-up of the new program was. According to the report, out of the more-than 9,000 banks that were eligible to borrow from the BTFP, 1,804 banks ended up using it. About 95% of those participating banks were smaller institutions (which means even [some large lenders](, with presumably ample access to funding, appear to have taken the facility up). “Stigma concerns do not seem to have been an obstacle to widespread usage of this emergency lending program,” says Lou Crandall, of Wrightson ICAP. “A wide swath of the banking industry will be looking for replacement funding when these subsidized Fed advances run off in the second half of this year” As Crandall notes, the BTFP expired last month as scheduled. And banking regulators have also made some [recent suggestions]( on how the discount window might be approved. And there are also other forms of bank support out there, such as the standing repo facility. But it’s still kind of funny that the BTFP stole the social spotlight so quickly. Meanwhile, the 'Fetch' of emergency lending facilities still hasn't happened. Tracy Alloway is the co-host of Bloomberg’s Odd Lots podcast. Follow her on X [@tracyalloway]( Like Bloomberg's Five Things? [Subscribe for unlimited access]( to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Close. [Bloomberg Markets Wrap: The latest on what's moving global markets. Tap to read.]( Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. Before it’s here, it’s on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can’t find anywhere else. [Learn more](. Want to sponsor this newsletter? [Get in touch here](. 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