Tuesday October 18th


Dow futures jump 600 points, Nasdaq futures add more than 2% as stocks look to continue comeback

U.S. stock markets index futures rose sharply Tuesday morning after the Nasdaq Composite posted its best daily performance since July. Nasdaq 100 futures climbed 2.37%. Futures tied to the Dow Jones Industrial Average gained 624 points, or 2.06%, and S&P 500 futures jumped 2.20%. Strong earnings results on Tuesday morning were adding fuel to a rally that began on Monday. Shares of Johnson & Johnson rose 1.7% in premarket trading after it beat estimates on the top and bottom lines for the third quarter. Goldman Sachs rose more than 2% after strong trading results helped the investment bank beat expectations for earnings and revenue. Those reports continued a strong stretch of earnings, including beats from Bank of America and Bank of New York Mellon on Monday. The Dow is coming off a strong start to the week, adding roughly 551 points on Monday. The S&P 500 also rose 2.65% for the day. The Nasdaq surged 3.43% as tech stocks rebounded, led by names such as Amazon, Meta Platforms and Microsoft. It was the best day for the tech-heavy index since July 27. Fears of a recession and overly aggressive central banks have helped push the U.S. markets to their lows of the year in recent weeks, but the solid start to earnings season may signal that the economy is currently in better shape than feared. “3Q and 4Q earnings should confirm fundamentals remain anchored in resilient labor market and Covid reopening. Equity valuation will likely remain tied to global central bank rhetoric and rates, which is turning incrementally less negative. As such, we see equities primed for upside into year-end on resilient 2H22 earnings, low equity positioning, very negative sentiment and given more reasonable valuation,” Dubravko Lakos-Bujas, JPMorgan’s head of global macro research, said in a note to clients. “Next year, however, we expect a more challenging earnings backdrop relative to current expectations,” he added. Shares in the Asia-Pacific traded higher on Tuesday after Wall Street’s rally overnight. In Australia, the S&P/ASX 200 gained 1.72% to 6,779.20, leading gains in the wider region. The Nikkei 225 was 1.42% up at 27,156.14, while the Topix added 1.16% to 1,901.44. The Hang Seng index in Hong Kong was 1.23% higher in the final hour of trade, with the Hang Seng Tech index up 3.3%. In mainland China, the Shanghai Composite turned negative and closed 0.13% lower at 3,080.96 and the Shenzhen Component added 0.23% to 11,187.70. South Korea’s Kospi was 1.36% higher at 2,249.95 and the Kosdaq was 2.21% up at 697.09. Oil prices were stable on Tuesday as the market balanced cuts to OPEC+ production quotas against fears of economic slowdown and lower Chinese fuel demand. Brent crude futures eased by 7 cents, or 0.08%, to $91.55 a barrel by 1127 GMT while U.S. West Texas Intermediate (WTI) crude futures were down 12 cents, or 0.14%, at $85.34. WTI had risen earlier by more than $1 a barrel on a weaker dollar, which makes oil cheaper for buyers holding other currencies. But the U.S. dollar index measuring the greenback against six peers rose later in the session, weighing on oil prices in European trading. Gold prices pared gains on Tuesday due to an uptick in the U.S. dollar and bond yields, although investors remained wary of more hefty interest rate hikes from the Federal Reserve. Spot gold was up 0.1% at $1,651.60 per ounce, while U.S. gold futures fell 0.4% to $1,657.70. “Any gain (in gold) is temporary, until the market anticipates the Fed to slow down its tightening pace,” said Giovanni Staunovo, a commodity analyst at UBS.