Thursday October 20th


S&P 500 futures are little changed as investors digest earnings, yield moves

U.S. stock markets index futures were mixed on Thursday as traders weighed several key earnings reports. Dow Jones Industrial Average futures rose 74 points, or 0.2%. S&P 500 futures were up less than 0.1%, and Nasdaq 100 futures dipped 0.1%. Several strong earnings reports were boosting the market, with AT&T, American Airlines and IBM all moving higher in premarket trading after beating estimates on the top and bottom lines for their most recent quarter. On the downside, Tesla shares dropped 4% in premarket trading after the electric vehicle maker said Wednesday evening it expects to miss its 2022 deliveries target. The company also posted a quarterly revenue that missed analyst expectations. Meanwhile, the benchmark 10-year Treasury yield reached a high of 4.18% on Thursday, briefly trading at levels not seen since 2008. It was last flat for the session near 4.13%. Rising rates have been a headwind for stocks all year, as the Federal Reserve continues to try and cool off inflationary pressures not seen in decades. The surge in yields on Thursday contributed to the end of a two-day winning streak for stocks, with the Nasdaq Composite sliding 0.85%. The Dow declined 99.99 points, or 0.33%, and the S&P 500 dipped 0.67%. “Despite recent market volatility, central bank tightening expectations have only increased as inflation readings around the world have continued to come in hot. While there are bound to be more big up & down days ahead, our intermediate-term bearish base case remains unchanged,” Chris Senyek of Wolfe Research said in a note to clients. On the economic front, the Philadelphia Fed manufacturing survey and the weekly jobless claims data are expected Thursday before the bell. Shares in the Asia-Pacific traded lower on Thursday as economic fears weigh. The Hang Seng index in Hong Kong pared some of its earlier losses and traded 1.33% lower in the final hour of trade after dipping 3%, hitting its lowest level since May 2009. The Hang Seng Tech index was 2.08% lower. In mainland China, the Shanghai Composite closed 0.31% lower at 3,035.05 after struggling for direction, while the Shenzhen Component shed 0.561% to 10,965.33. In Japan, the Nikkei 225 lost 0.92% to 27,006.96 and the Topix shed 0.51% to 1,895.41. The S&P/ASX 200 in Australia declined 1.02% to 6,730.70. South Korea’s Kospi dipped 0.86% to 2,218.09 and the Kosdaq was 1.47% lower at 680.44. Oil prices rose by more than $1 on Thursday in response to tighter supplies and on news that China is considering a cut in the duration of quarantine for inbound visitors. Brent crude futures rose $1.33, or 1.4%, to $93.74 a barrel at 1020 GMT. U.S. West Texas Intermediate crude for November delivery , which expires on Thursday, rose $1.43, or 1.7%, to $86.98 per barrel. The WTI contract for December delivery was up 1.8%, or $1.51, at $86.03 a barrel. Gold prices edged higher on Thursday due to a slight pullback in the U.S. dollar, although higher Treasury yields and prospects of more sharp rate hikes by Federal Reserve kept gains in check. Spot gold rose 0.2% to $1,631.54 per ounce by 0909 GMT. U.S. gold futures inched 0.1% higher to $1,636.50. The dollar index was down 0.1% against its rivals, making gold less expensive for other currency holders.