Wall Street starts the week in the red as investors prepare for a week full of top-line financial results that could fuel or stop a record rally. This occurs in a context in which the world stock markets They started the week on a lukewarm note on Monday, following last week’s strong gains, while Increasing bets on Donald Trump’s victory in the impending US presidential election are helping Bitcoin and gold hit new highs.
In the US, the S&P 500 fell 0.5%, moving away from a new historical close, but accumulating its sixth consecutive week of gains. The Dow Jones Industrial Average (^DJI) slides almost 0.1% lower, while the tech-heavy Nasdaq Composite (IXIC) loses 0.2%.
The continuity of the records depends largely on corporate results in the coming days. Earnings season heats up this week, with more than 100 S&P 500 companies scheduled to report. So far, 80% of the third quarter updates included in the index have exceeded expectations.
Investors are nervous about the report Tesla (TSLA) filing on Wednesdayafter its presentation of the robotaxi did not meet expectations. The electric vehicle manufacturer is the main focus of the week, amid questions about the performance of big technology companies, including following Netflix’s (NFLX) strong start to the large cap season.
Wall Street: the data to come
General Motors (GM), Coca-Cola (KO), American Airlines (AAL) and UPS (UPS) are other big names on this week’s earnings agenda.
Boeing (BA) faces a double challenge on Wednesday, when it is expected to release its results at the same time as workers vote on whether to accept a tentative agreement reached with the union to end a five-week strike. Shares of the plane maker rose more than 3% in early Monday trading.
Meanwhile, oil prices recovered, rising nearly 2% alongside gains in Chinese stocks (000300.SS), as China’s stimulus push continued with a cut in key interest rates. Brent futures, the global benchmark, traded near $74 a barrel, while West Texas Intermediate crude futures (CL=F) rose above $70, with Israel’s upcoming move toward Iran also in focus.
All eyes are on the financial results this week. According to FactSet, 112 S&P 500 companies, including seven in the Dow, are scheduled to report their third-quarter results. Tesla, Coca-Cola and IBM will be among the most prominent. So far, about 80% of S&P 500 companies that have reported have beaten expectations, and earnings are expected to rise for the fifth consecutive quarter.
European and Asian stock markets started the week mostly down.
The pan-European STOXX 600 index is trading virtually flat ahead of results from German giant SAP, which could set the tone for a busy earnings week on both sides of the Atlantic. “The results will be very important in guiding stocks, whether current valuations in the United States can be justified or not,” said Chris Scicluna of Daiwa Capital Markets in London.
Bitcoin hit its highest since late July at $69,487 before retreating slightly. The world’s largest cryptocurrency gained 9.6% last week and has accumulated an increase of more than 8% for the month. And the dollar index, which compares the greenback with a basket of six major currencies, rose 0.16% to 103.61 units, close to the two-month highs reached last week. Crude oil prices added more than 1% after losing more than 7% last week.
China generates expectations
Meanwhile, optimism over the raft of stimulus measures announced by Beijing in September has turned to caution in recent days as investors await more details on fiscal support from authorities. Although China cut benchmark interest rates on Monday, the move was expected and the Chinese stock index rose just 0.2%.
Source: Ambito
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