United States equities saw a high opening on Thursday with market analysts and investors parsing through a new batch of economic data and corporate earnings results as sovereign bonds around the globe went down. Bristol-Meyers Squibb, Colgate-Palmolive, UPS, and Ford are just some of the players in the market who posted their quarterly results sometime before the bell, with Amazon.com, Alphabet, Baidu and LinkedIn being a few companies that are set to post their data after the bell.
So much has been witnessed in the stock market, with CMC Markets clearly showing that corporate earnings have released good results relative to expectations leveled by investors. In reference to the data by the Earnings Scout, 39% of S&P 500 components had given their results as of Wednesday, 26th October morning. Among them 62 per cent managed to top the sales expectations while 76 per cent were able to beat the earnings estimates.
It is evident that portfolio managers will largely focus on the earnings as the season progresses towards the better part of the Q3 reporting period. The P/E ratio for the S&P 500 resides at 4.6 per cent lower than the after-financial crisis peak.
Sticking with the economic news, durable goods for September unexpectedly dropped while the initial unemployment claims went down by 3,000 to hit 258,000. The pending housing vacancies and home sales are also set to made public later on 10 am ET this Thursday.
The United States economic data has been of particular importance to the investors in the recent period since it is used to judge on the probability of the Federal Reserve raising the interest rates later before the end of the year. The U.S. central bank is scheduled to hold a meeting later next week and, whereas the monetary policy is hugely expected to remain unaffected, market participants predict a quarter-point rate rise later after the Federal Reserve meeting in December.
In spite of the cascade of economic data and corporate results, United States stocks have managed to stay on a range-bound, with the S&P going down by just 1.25 per cent over the past two and a half months up to the closing on Wednesday.
It seems the market has been going back and forth; only waiting for the catalyst to stir up the status quo. It is apparent though that the tone of the market has been fed by fewer and fewer stocks that direct it to the upward trend. Additionally, there are concerns that surround the outcome of the United States presidential election on November 8; according to one site in the U.S., the gap between the Democratic Party’s nominee, Hillary Clinton and Republicans Donald Trump seems to have narrowed.
The United States Treasury yields went up in a huge swing, having the two-year note yield set it’s trading at around 0.88 per cent while the benchmark, the 10-year yield was trading at around 1.84 per cent, closely in pursuit of other sovereign bond yields. The 10-year United Kingdom Gilt yield dashed about eight points to 1.238 per cent following the surprisingly better GDP from the UK.
It is certain that traders and investors were on the lookout for an upbeat number, and we can conclude that it is now in their hands – surprisingly far better than any player in the market would expect. However, the industrial and manufacturing sector seems to have given out a poor performance.
We cannot really conclude that the effects of the Brexit have subsided – it is too early to do so. The hesitant nature of foreign investors on the path UK economic growth will take is almost palpable. Of course, the focus is geared towards the resilience picture and enormous rise in business investment.
The United States Dollar traded flat to a lower rate against a basket of six other currencies. It went with the Yen at around 104.9, and the Euro at $1.092. However, the GBP went down 0.23 per cent to around $1.223.
Europe’s equities went up slightly, having the pan-European Stoxx 600 index hitting 0.08 per cent. In Asia, the stocks mostly closed at a lower rate with the Shanghai Composite going down 0.13 per cent while the Nikkei 225 slipped 0.32 per cent.