Monday October 25th

25-10-2021

Nasdaq futures rise ahead of a big week for tech earnings

U.S. stock index futures were slightly in the green Monday after the Dow Jones Industrial Average closed its third positive week in a row at a record, driven by better-than-expected earnings reports. Dow futures gained 25 points. S&P 500 futures were up about 0.2%. Futures for the tech-heavy Nasdaq 100 were the standout, trading up by 0.3% ahead of big earnings reports for major companies in the industry. Wall Street is coming off a winning week on the back of strong corporate earnings. The blue-chip Dow gained more than 1% last week and closed Friday at a record. The S&P 500 rallied 1.7% last week, also posting its third straight positive week and hitting an all-time high Friday. Of the 117 companies in the S&P 500 that have reported earnings to date, 84% posted numbers that beat expectations, according to Refinitiv. S&P 500 companies are expected to grow profit by about 35% in the third quarter. “Rising tide of earnings is lifting all the boats and adding fuel to the bull market fire,” said Anu Gaggar, global investment strategist at Commonwealth Financial Network. “The 3Q earnings season is off to a strong start despite concerns about supply bottlenecks and labor shortages.” Some of the biggest technology companies are slated to report earnings this week, including Facebook, Alphabet, Microsoft, Amazon and Apple. A third of the Dow companies also is set to release quarterly results this week, including Caterpillar, Coca-Cola, Boeing and McDonald’s. Microsoft and Amazon were higher in premarket trading ahead of their results this week. Shares of Facebook, however, were under pressure after the release of more whistleblower documents. Shares of Tesla, which reported record revenue and profits last week, gained 4% in premarket trading Monday after Morgan Stanley hiked its price target on the shares to $1,200 from $900. Energy stocks were poised to open higher as West Texas Intermediate crude futures touched $85 per barrel. Major averages have all registered solid gains for October. The Dow and the S&P 500 are both up more than 5%, while the Nasdaq Composite has climbed 4.4% month to date. Leading the October rally in the broader market has been the energy sector, which is up 11% this month. Industrials, real estate, materials and financials have all popped at least 7% over the same period. “Transports, consumer discretionary, and large-cap tech have led the market higher these past two weeks, signaling that growth worries around supply chain constraints are beginning to fade,” said Lindsey Bell, chief investment strategist at Ally Invest. Shares in Asia-Pacific were mixed on Monday as investors reacted to the release of HSBC earnings. Hong Kong’s Hang Seng index closed little changed at 26,132.03. Hong Kong-listed shares of HSBC rose 0.43% after the bank on Monday reported a pre-tax profit in the third quarter of 2021 that bested expectations. Mainland Chinese stocks closed higher, with the Shanghai composite gaining 0.76% to 3,609.86 while the Shenzhen component advanced 0.717% to 14,596.72. Japan’s Nikkei 225 closed 0.71% lower at 28,600.41 while the Topix index shed 0.34% to 1,995.42. South Korea’s Kospi gained 0.48%, closing at 3,020.54. Oil prices rose on Monday, extending pre-weekend gains, with U.S. crude hitting a seven-year high as global supply remained tight amid strong demand worldwide as economies recover from coronavirus pandemic-induced slumps. Brent crude futures climbed 61 cents, or 0.7%, to $86.14 per barrel, following on from last Friday’s 1.1% gain. The contract was near a three-year high of $86.10, hit last Thursday. U.S. West Texas Intermediate (WTI) crude futures rose 70 cents, or 0.85%, to $84.47 a barrel, after climbing 1.5% on Friday. It touched its highest since October 2014 — $84.28 — earlier in the session. Gold prices held firm on Monday near the key level of $1,800 as a drop in the U.S. dollar bolstered bullion’s safe-haven appeal, while investors cautiously eyed the next Federal Reserve meet for guidance on its monetary policy. Spot gold was up 0.6% at $1,803.06 per ounce. U.S. gold futures rose 0.4% to $1,802.80.