Strong earnings reports from Goldman Sachs and Johnson & Johnson before the market spiked investor sentiment and eased fears that rising inflation and interest rates could lead to a recession. Major US equity indices opened bullish Tuesday (18 °). Shares of Goldman Sachs rose more than 4%, while Johnson & Johnson fell more than 1%.
Before the deadline,Industrial average of the Dow Jonesup to nearly 500 points or nearly 1.7%,Nasdaq Composite Indexincreased by more than 200 points or 2.1%,S&P 500 Indexincreased by almost 1.8%,Semiconductor of PhiladelphiaThe index was up nearly 2.4%.
S&P 500 IndexAfter closing above key technical support levels a few days ago,S&P 500 IndexFutures rose 2%,Nasdaq 100 Index futures were also up 2.2%, and with the futures index higher, the market believes US equities will also extend previous gains.
In terms of individual stocks, financial reports from major Wall Street banks have once again spread good news: Goldman Sachs ‘third-quarter revenue and earnings were better than analysts’ expectations and the share price rose ahead of the market. At the same time, Johnson & Johnson (JNJ-USA) also provided a good third-quarter report card ahead of the market, with revenues exceeding analysts’ expectations, but lowered its profit forecast due to the strengthening dollar and was cautious about the outlook.
Additionally, sports streaming company FuboTV (FUBO-US) announced the cancellation of the lottery business and raised its sales forecast and its shares rose more than 10% in pre-market trading.
Specifically, Netflix (NFLX-USA) will announce its latest earnings report after the market close on Tuesday, after the company posted losses for two consecutive quarters. Netflix previously predicted a 1 million subscriber growth in the quarter due to improved content.
However, Netflix’s subscriber loyalty was tested after increasing subscription rates subsequently, but most studies show that consumers are the last to cancel their Netflix subscriptions compared to other streaming services.
In Britain, British government bond prices rebounded after new Chancellor of the Exchequer Jeremy Hunt canceled tax cuts and spending plans as the country’s financial markets returned to calm. However, UK bonds fell again after the Bank of England delayed its quantitative tightening on fears that the market would remain fragile. However, a spokesman for the Bank of England later came forward saying that reports of a delay in quantitative tightening were “inaccurate”.
Strong earnings from US companies, lower valuations to attract buyers and a turnaround in UK policy to ease concerns on the country’s markets have strengthened investor sentiment towards risky assets. But how long the US equity rally can last amid inflation, recession risks and the ongoing confrontation of an aggressive central bank with investors is questionable.
In energy terms, international oil prices remained stable on Tuesday as the market digested the Organization of Petroleum Exporting Countries and Partner Countries (OPEC +) cuts in small tin production, as well as concerns over the slowdown. of economic growth and falling demand in China.
Starting at 9:00 pm on Tuesday (6pm) Taipei time:
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Hasbro (HA-US) rose 0.88% to $ 68.31 per share at the start of the trade
Toy maker Hasbro reported mixed earnings last quarter, with earnings per share of just $ 1.42 per share, missing consensus estimates of $ 1.52, despite revenue of $ 1.68 billion in line with market expectations. The company said the main reason for the weaker-than-expected profit was that inflation was holding back consumers. Hasbro shares fell 3.5% in pre-market trading.
Goldman Sachs (GS-USA) rose 4.29% to $ 319.88 per share at the start of the trade
Goldman Sachs, one of Wall Street’s largest banks, delivered a qualified third quarter report card: While total revenue dropped 12% to $ 11.98 billion, it still exceeded market expectations by $ 11.41 billion ; net profit was reported at $ 2.96 billion, or per share. Profit of $ 8.25 was well below the previous year’s $ 5.28 billion or $ 14.93, but profit per share was still above the consensus estimate of $ 7.69.
Amazon (AMZN-USA) rose 3.30% to $ 117.55 per share at the start of the trade
Citigroup is bullish on Amazon, believing the stock will perform well in the event of a weak or hard US economic landing, making it the best choice for fighting a recession. The news prompted Amazon shares to rise 3.71% in pre-market trading.
The main economic data today:
- The monthly growth rate of the US Industrial Production Index in September was 0.4%, expected to be 0.1%, the previous value – 0.1%
- The annual growth rate of the US Industrial Production Index in September was 5.33%, the previous value was 3.91%
- The October US NAHB real estate index reported 38, expected 43, the previous value of 46
Wall Street Analysis:
Craig Erlam, an analyst at OANDA, said the stock market saw a bear market rally last week, the economic outlook remains bleak, and it’s not even clear whether inflation and interest rates have peaked. These factors are huge headwinds. It is challenging.
The Bank of America survey showed a broad capitulation of fund managers’ views on the stock market and global economic growth, although it also paved the way for a stock market rally next year.
Bank of America’s monthly survey of global fund managers “shows eye-popping capitulation on macroeconomics, investors and politics,” wrote a team of strategists led by Michael Hartnett in a report Tuesday, but expects the Fed to bottom out on equities. . first half of 2023 after the (Fed) finally withdrew from raising interest rates.
