By IFCMarkets
US stocks advanced on Monday as investors awaited third quarter corporate earnings reports. The dollar was little changed versus most major currencies, with the ICE US dollar index, a measure of the dollar’s strength against a basket of six currencies, ending up 0.1%. The S&P 500 live data indicate S&P 500 rose 0.1% to a seven-week high, with eight of its ten main sectors closing with gains led by utilities and consumer discretionary stocks. After Alcoa unofficially started the reporting season on Thursday 35 S&P 500 companies will report results this week. Investors will particularly focus on financials sector as JPMorgan, Goldman Sachs, Bank of America, Wells Fargo and Citigroup report this week. Today Johnson & Johnson, Intel Corp. and JPMorgan Chase reports are due. According to Thomson Reuters, S&P 500 companies are now expected to report a 4.5% fall in third-quarter profits, the biggest decline in six years while financial companies are expected to show earnings growth of 8.4%, down from the 14.8% expected at the start of the quarter. Comments by Federal Reserve officials on Monday indicated policy makers have not changed their views on timing of the first interest rate hike since 2006. Fed Bank of Atlanta President Dennis Lockhart repeated his support for the rate hike while Chicago Fed’s Charles Evans reiterated his support for a later increase as inflation is low and is struggling to pick up. Today at 11:00 CET National Federation of Independent Business October small business index will be released in US. The tentative outlook is negative for the dollar. At 13:00 CET Federal Reserve Bank of St. Louis President Bullard Speaks to National Association for Business Economics in Washington.
European stocks declined on Monday ending six day winning streak. The euro was little changed against the dollar at $1.1363. The Stoxx Europe 600 index fell 0.3% after closing up 4.3% last week supported by minutes from the Fed’s September policy meeting which showed the Federal Reserve was cautious to raise interest rates. Germany’s DAX 30 index outperformed other major national indexes and rose 0.2%, lifted by E.ON and RWE which rallied 4.9% and 9.3% respectively after the German government said they had set aside enough money to decommission their nuclear plants. Inflation report indicated today final consumer price index in September remained flat in Germany. Today at 10:00 CET October ZEW survey results for Germany and euro-zone will come out. The tentative outlook is negative for euro. Inflation report today indicated consumer prices in Britain unexpectedly fell 0.1% in August year-over-year.
Nikkei fell 1.1% today as investors took profits on previous week’s gains and sold off oil related stocks after crude prices tumbled. Inpex Corp and Japan Petroleum Exploration shares fell 3.4% and 3.2% respectively. Airline shares rose supported by falling oil prices. Pioneer stock rallied 8.8% on a favorable market report by Deutsche Bank. Tomorrow 00:50 CET domestic corporate goods price for September and money stock will be released in Japan. The tentative outlook is negative.
Trade data showed today China’s exports fell less than expected in September, but imports were below expectations and tumbled for 11 months in a row, losing over 20% year-on-year. Commodities and metals declined following the report.
Oil futures quotes are edging higher today after tumbling on Monday as a monthly bulletin by the Organization of the Petroleum Exporting Countries indicated OPEC output rose 109,000 barrels a day in September to 31.57 million.
Free Reports:
Market Analysis provided by IFCMarkets