Monday October 24th


Dow futures rise as Wall Street tries to build on its best week since June

U.S. stock markets index futures rose Monday, as traders tried to add to sharp gains seen in last week. Futures tied to the Dow Jones Industrial Average rose 207 points, or 0.7%. S&P 500 futures and Nasdaq 100 futures gained 0.6% and 0.3%, respectively. The 10-year Treasury yield on Monday continued it’s retreat from a 14-year high and was last yielding 4.17%. At one point on Friday it topped 4.33% before the Wall Street Journal reported that some Federal Reserve officials were growing concerned about raising interest rates too far. The moves come after yet another volatile week for stocks as third-quarter earnings season heats up. The major averages had their biggest weekly gains since June, with the Dow advancing 4.9%. The S&P 500 and Nasdaq rose 4.7% and 5.2%, respectively. A chunk of those gains came Friday, when the Dow rallied more than 700 points, while the S&P 500 and Nasdaq each popped around 2.3%. Investors will watch for earnings from tech giants such as Apple, Alphabet, Amazon and Microsoft this week. Wall Street will also be watching for more inflation data, with the October manufacturing and services purchasing managers indexes coming Monday. “The S&P 500 was up +4.7% on the week, with energy/materials and technology outperforming and defensive sectors underperforming in essentially a reversal of the broad-based trend since early August,” said Raymond James analyst Tavis McCourt in a Sunday note. “Whether the rally is sustainable, or to what degree, is unknowable, but the reasons appear to be EPS revisions, which appear to be better than feared so far (much like 2Q), along with expectation that a front-end loaded Fed cycle could be coming to an end by early 2023.” So far, earnings reports have had mixed results for stocks. On Friday, bank stocks Goldman Sachs and JPMorgan Chase gained more than 4% after reporting results. But not all results have been solid — Snap shed 28% after reporting an earnings miss. Hong Kong stocks and mainland China markets fell sharply Monday while other major Asia-Pacific markets rose. Hong Kong’s Hang Seng index spiraled down 6.36% to 15,180.69, its lowest levels since April 2009, with the Hang Seng Tech index down more than 9%. Mainland China markets briefly entered positive territory on better-than-expected economic data before falling again. The Shanghai Composite in mainland China was 2.02% lower at 2,977.56, and the Shenzhen Component lost 2.055% to 10,694.61. In Australia, the S&P/ASX 200 was 1.54% higher at 6,779.40. The Kospi in South Korea gained 1.04% to 2,236.16, and the Kosdaq added 2.08% to 688.50. Japan’s Nikkei 225 climbed 0.31% to 26,974.90 and the Topix was up 0.28% to 1,887.19. Oil prices slid on Monday after Chinese data showed that demand from the world’s largest crude importer remained lackluster in September as strict Covid-19 policies and fuel export curbs depressed consumption. Brent crude futures for December settlement last fell $1.19 or 1.27%, to $92.31 a barrel after rising 2% last week. U.S. West Texas Intermediate crude for December delivery was at $83.49 a barrel, down $1.56, or 1.82%. Gold retreated on Monday as the dollar climbed, while investors looked for hints on a shift in Federal Reserve monetary policy which has so far kept a leash on bullion prices. Spot gold was last down 0.4% at $1,650.00 per ounce. U.S. gold futures eased 0.09% to $1,654.80. Expectations that some Fed officials were debating a pause in the rapid pace of interest rate hikes helped gold rally on Friday as the U.S. dollar eased.