Monday October 17th


Stock futures jump Monday after a rollercoaster week as key earnings reports roll out

U.S. stock markets index futures rose Monday as investors weighed key earnings reports after a wild week of trading. Futures on the Dow Jones Industrial Average gained 340 points, or 1.1%. S&P 500 futures and Nasdaq 100 futures advanced 1.4% and 1.8% higher, respectively. Monday’s moves came as the British pound rose on more policy reversals from the UK government. New UK finance minister Jeremy Hunt announced that almost all planned tax cuts would be scrapped. The pound traded 1% higher at $1.127 per U.S. dollar. The S&P 500 just came off its fourth negative week in five with a 1.6% loss last week. A hotter-than-expected inflation reading stoked wild price swings in the markets as investors readjusted their expectations for the Federal Reserve’s coming rate hikes. “As inflation remains elevated for longer and the Fed hikes further, the risk increases that the cumulative effect of policy tightening pushes the U.S. economy into recession, undermining the outlook for corporate earnings,” Mark Haefele, CIO at UBS Global Wealth Management, said in a note. Meanwhile, the third-quarter earnings season has kicked off. Investors are monitoring if corporate America will have any significant downward revisions to their outlooks in the face of stubbornly high inflation and the economic slowdown. Bank of America on Monday reported better-than-expected results, sending the stock higher in the stock higher in the premarket. Bank of New York Mellon also posted results that beat analyst expectations. JPMorgan Chase and Wells Fargo reported solid results last week, while Morgan Stanley’s equity trading revenue disappointed. Many notable technology names are also reporting this week,  Including Netflix, Tesla and IBM. Johnson & Johnson, United Airlines, AT&T, Verizon and Procter & Gamble are other big companies on investors’ radar. Shares in the Asia-Pacific were mixed on Monday as recession fears weigh in over expectations of continued tighten monetary policies around the world. The Nikkei 225 fell 1.16% to 26,775.79 while the Topix lost 0.98% to 1,879.56. The U.S. dollar continued to hover at 32-year highs against Japan’s yen, last trading at 148.65 per dollar. In Australia, the S&P/ASX 200 was 1.4% lower at 6,664.40. Hong Kong’s Hang Seng index was marginally higher in the final hour of trade after reversing losses, while the Hang Seng Tech index was 0.67% lower. The Shanghai Composite in mainland China pared earlier losses and gained 0.42% to 3,084.94, while the Shenzhen Component was up 0.365% to 11,162.26. South Korea’s Kospi also recovered earlier losses and gained 0.32% to 2,219.71. Oil prices were steady on Monday as China’s continuation of loose monetary policy was offset by fears that high inflation and energy costs could drag the global economy into recession. Brent crude futures rose 50 cents, or 0.6%, to $92.13 a barrel, recovering from a 6.4% fall last week. U.S. West Texas Intermediate crude was at $86.06 a barrel, up 43 cents, or 0.5%, after a 7.6% decline last week. Gold prices gained on Monday, helped by a slight pullback in the U.S. dollar and Treasury yields, even as fears lingered about more hefty Federal Reserve rate hikes to tame soaring inflation. Spot gold was up 0.9% at $1,656.12 per ounce after declining more than 3% last week in its worst performance since July. U.S. gold futures climbed 0.8% to $1,662.