Strong earnings reports from Goldman Sachs and Johnson & Johnson before the market boosted investor sentiment and eased concerns that rising inflation and interest rates could lead to a recession. The major U.S. stock indexes opened higher on Tuesday (18th). Goldman Sachs shares rose more than 4 percent, while Johnson & Johnson fell more than 1 percent.
Before the deadline,Dow Jones Industrial Averageup nearly 500 points or nearly 1.7%,Nasdaq Composite Indexrose more than 200 points or 2.1%,S&P 500 Indexrose nearly 1.8%,Philadelphia SemiconductorThe index rose nearly 2.4 percent.
S&P 500 IndexAfter closing above key technical support levels a few days ago,S&P 500 IndexFutures climbed 2%,Nasdaq 100 index futures also rose 2.2%, and with the futures index higher, the market believes that US stocks will also extend previous gains.
In terms of individual stocks, the financial reports of major Wall Street banks spread good news again. Goldman Sachs’ third-quarter revenue and profit were better than analysts’ expectations, and the stock price rose before the market. At the same time, Johnson & Johnson (JNJ-US) also delivered a good third-quarter report before the market, with revenue beating analysts’ expectations, but it lowered its profit forecast due to a stronger dollar and was cautious about the outlook.
In addition, sports streaming company FuboTV (FUBO-US) announced the cancellation of the lottery business and raised its sales forecast, and its shares rose more than 10% in premarket trading.
Notably, Netflix (NFLX-US) will announce its latest earnings report after the market closes on Tuesday, after the company has recorded losses for two consecutive quarters. Netflix had previously forecast subscriber growth of 1 million in the quarter due to improved content.
However, Netflix’s subscriber loyalty has been tested after successively raising subscription fees, but most studies show that consumers are the last to cancel their subscriptions to Netflix compared to other streaming services.
In Britain, British government bond prices recovered after the new Chancellor of the Exchequer Jeremy Hunt scrapped tax cuts and spending plans as the country’s financial markets returned to calm. However, British bonds fell again after reports that the Bank of England will delay quantitative tightening amid concerns that the market remains fragile. However, a Bank of England spokesman later came forward to say reports of a delay in quantitative tightening were “inaccurate”.
Strong earnings from U.S. companies, lower valuations to lure buyers and a U.K. policy turnaround to ease concerns in the country’s markets have boosted investor sentiment toward risk assets. But how long the U.S. stock rally can last amid inflation, recession risks and a hawkish central bank’s ongoing confrontation with investors is debatable.
In terms of energy, international oil prices were stable on Tuesday, as the market digested the reduction of small tin production by the Organization of the Petroleum Exporting Countries and partner countries (OPEC+), as well as concerns about slowing economic growth and declining demand in China.
As of 21:00 on Tuesday (18th) Taipei time:
Stocks in focus:
Hasbro (HAS-US) rose 0.88% to $68.31 a share in early trade
Toy maker Hasbro reported mixed earnings last quarter, with earnings per share of just $1.42 a share, missing consensus estimates of $1.52, despite revenue of $1.68 billion in line with market expectations. The company said that the main reason for the weaker-than-expected profit was that inflation was holding consumers back. Hasbro shares fell 3.5% in premarket trading.
Goldman Sachs (GS-US) rose 4.29% to $319.88 a share in early trade
Goldman Sachs, one of Wall Street’s biggest banks, delivered a qualified third-quarter report card. Although total revenue fell 12% to $11.98 billion, it was still higher than market expectations of $11.41 billion; net profit was reported at $2.96 billion, or per share Earnings of $8.25 were well below the $5.28 billion or $14.93 a year earlier, but earnings per share were still higher than the consensus estimate of $7.69.
Amazon (AMZN-US) rose 3.30% to $117.55 a share in early trade
Citigroup is bullish on Amazon, believing that the stock can perform well in the event of a soft or hard U.S. economic landing, making it a top pick for fighting a recession. The news prompted Amazon’s shares to jump 3.71 percent in premarket trading.
Today’s key economic data:
- The monthly growth rate of the U.S. industrial production index in September was 0.4%, expected 0.1%, the previous value – 0.1%
- The annual growth rate of the US industrial production index in September was 5.3%, the previous value was 3.68%
- US October NAHB housing index expected to 43, the previous value of 46
Wall Street Analysis:
Craig Erlam, an analyst at OANDA, said the stock market had a bear market rally last week, the economic outlook remains bleak, and it’s not even clear whether inflation and interest rates have peaked. These factors are huge headwinds. Making any stock market rally is challenging.
The Bank of America survey showed a broad capitulation of fund managers’ views on the stock market and global economic growth, though it also paved the way for a stock market rally next year.
Bank of America’s monthly survey of global fund managers “shows an eye-popping capitulation on macroeconomics, investors and policy,” a team of strategists led by Michael Hartnett wrote in a report on Tuesday, but forecasts that the Fed will Stocks will bottom in the first half of 2023 after the (Fed) finally backs off from raising interest rates.