Tuesday November 1st


Stock futures rise as traders try to add to October’s strong gains, look to Fed meeting

U.S. stock markets index futures rose Tuesday, the first day of November, as Wall Street tried to build on last month’s sharp gains and looked ahead to a key Federal Reserve decision on rates. Futures tied to the Dow Jones Industrial Average were up 230 points, or 0.7%. S&P 500 and Nasdaq 100 futures added 1.1% and 1.4%, respectively. The rise in stock futures came as rates fell ahead of the central bank’s rate decision as investors hope for a sign that the Fed will ease its tightening stance in the months ahead. A better-than-feared earnings season, meanwhile, continued with a strong report from Pfizer while Uber shares popped on a revenue beat and strong gross bookings. Some traders also pointed to optimism from unconfirmed reports that China could be moving away from its Zero Covid policy as a source for Tuesday’s early gains. “Stocks are trading very well following unconfirmed reports on social media overnight about China formulating a plan to exit its ‘zero tolerance’ approach to COVID,” wrote Adam Crisafulli of Vital Knowledge. “While the consensus narrative has embraced the ‘Fed will slow its tightening pace’ narrative, China remains among the most hated markets on the planet w/its equity indices at multi-decade lows – there’s still a lot more room to rally on the upside in the coming quarters assuming a more realistic COVID approach is implemented,” he added. Wall Street on Monday wrapped up a strong month of gains, with the Dow rallying nearly 14% for its biggest monthly advance since January 1976, as investors rotated out of technology and hedged hopes on stalwarts like banks. The S&P 500 and Nasdaq Composite added about 8% and 3.9%, respectively. Tuesday also kicks off the Fed’s November meeting, which many expect will result in a 75 basis point interest rate hike. Investors will also monitor the central bank’s statement and Fed Chair Jerome Powell’s press conference for signs that the Fed may slow its tightening pace. Economic releases for Tuesday include job openings data and construction spending for September. The ISM  manufacturing report for October is also due. Stocks in Hong Kong led gains in the Asia-Pacific session after concluding the month of October with a more than 14% loss, hovering around the lowest levels that it’s seen since April 2009. The Hang Seng index in Hong Kong rose 5.23% to 15,455.27, with Hang Seng Tech up 7.8% after unconfirmed reports of reopening talks taking place in China. Mainland China’s Shanghai Composite gained 2.62% to 2,969.20 and the Shenzhen Component added around 3.24% to 10,734.25 after the Caixin manufacturing PMI for the country came in at 49.2, slightly better than expected. The Nikkei 225 in Japan was 0.33% higher at 27,678.92 while the Topix rose 0.47% to 1,938.50.The Kospi in South Korea also rose 1.81% to 2,335.22. Oil prices rose on Tuesday, paring losses from the previous session, as a weaker U.S. dollar offset widening Covid-19 curbs in China that have stoked fears of slowing fuel demand in the world’s second-largest oil consumer. Brent crude for January delivery rose 73 cents, or 0.8%, to $93.54 a barrel at 0406 GMT. The December contract expired on Monday at $94.83 a barrel, down 1%. U.S. West Texas Intermediate (WTI) crude rose 58 cents, or 0.7%, to $87.11 a barrel, after falling 1.6% in the previous session. Gold prices were flat on Tuesday, after touching their lowest levels in more than one week, as the dollar held firm ahead of the U.S. Federal Reserve’s policy meeting, where the central bank is likely to deliver another oversized interest rate hike. Spot gold was listless at $1,633.69 per ounce, as of 0059 GMT, having earlier touched its lowest level since Oct. 21. U.S. gold futures fell 0.3% to $1,636.30. The dollar index was steady after rising 0.8% overnight, hurting gold’s appeal for overseas buyers.