Opening Bell: U.S. Futures Waver Ahead Of Fed Minutes; Oil Slips


  • European, Asian indices gain
  • US futures reverse early gains ahead of FOMC minutes release
  • Dollar consolidates as Treasury yields hold above 3.1 percent

Key Events

Global stocks gained ground this morning after US equities posted their best performance in six months yesterday, as upbeat earnings reports dispelled fears that the US-China trade war would hamper corporate growth. However, futures tracking the , and started edging lower as the European morning session progressed, as US investors’ attention moved to the upcoming release of the from the Fed’s latest monetary policy meeting.

Netflix Daily Chart

Netflix Daily Chart

(NASDAQ:) shares spiked 14 percent in after hours trading after the media company reported a seven million surge in subscribers to 137 million—a third more than expected. Net profit for the July to September period more than tripled compared to the same quarter last year, from $130 million to $403 million.

Revenues gained $ 4 billion, or 34 percent. The stock had already rallied 4 percent ahead of its Q3 2018 report, closing at $346.40 for an aggregate surge of 78 percent this year, which brings the company’s market cap to almost $154 billion. As of 3:38 EDT, the futures price of the stock is $384.10, an additional 10.88 percent rise since yesterday’s close.Technically, it is below the $386.680 peak posted on October 2, suggesting potential supply might still push back.

European shares on the are building on yesterday’s US technology rally, with tech and and chemical company shares edging higher after positive earnings results from chipmaker (AS:) and (SIX:).

Earlier, during Asian trade, the rebounded from its lowest level since May 2017, helped via a leap forward by Japan’s ) (+1.29), the leader of the regional pack. Australia’s (+1.18 percent) came in a close second, followed by South Korea’s (+1.04 percent).

Recent threats of further tariffs by US President Donald Trump seem to have kept China’s equity market bulls at bay. The posted a moderate 0.6 percent gain and Hong Kong’s barely eked out a profit of 0.07 percent.

Global Financial Affairs

Conversely, during yesterday’s US session, corporate optimism helped bulls resume Friday’s run, propelling prices to their highest in six months.

SPX Daily Chart

SPX Daily Chart

The surged 2.15 percent, with all sectors closing in the green and even “laggard” (+1.03 percent) gaining over a full percentage point. (+3.01 percent) was the clear leader, followed by (+2.64 percent). The SPX’s aggregate gains from last week’s selloff stands at 3 percent, which pares the drop since the record close of a little over a month ago to 4.3 percent. Technically, the price jumped back over the 200 DMA and is below the 100 DMA.

The leaped even higher, gaining 2.17 percent. All 30 stocks that make up the mega cap industrial index advanced. The total rebound from last week’s selloff is 2.95 percent, which has trimmed the slide since the index’s record close two weeks ago to 3.7 percent. Technically, the price jumped back above the 100 DMA and is below the 50 DMA. It crossed back above the 200 DMA last Friday.

The outperformed its peers, climbing 2.89 percent—the most since March. Technically, the price opened above the 200 DMA and advanced toward the 100 DMA. UnitedHealth Group (NYSE:) jumped 4.83 percent to a new all-time high, bolstering health care firms, while ‘s (NASDAQ:) upbeat forecasts lifted the software maker’s stock by a whopping 9.53 percent, a gain of 5.69 percent from the stock’s record close two weeks ago.

(NYSE:) slipped lower in late trading as the IT company’s revenue missed analyst targets.

The edged 2.82 percent higher, its sharpest climb since the day after the 2016 presidential election. Technically, it closed below its broken uptrend line since the February 2016 bottom, after being the only major US benchmark to violate that trend line.

So far, stocks have been falling on fear and speculation over ongoing geopolitical issues but gaining on fundamentals. As long as macroeconomic data continues to show an expanding economy and companies keep demonstrating growth, prompting demand to outpace supply as can be seen on the technical charts, stocks should continue to advance.

The only fundamental caveat comes from . Investors will need to decide at what point the cost of borrowing offsets the benefit of economic and company growth. Meanwhile, we can expect continued as investors shift positions according to a fluid decision-making process and speculators react to rumors.

Commodities and FX markets remained steady this morning, ahead of economic data and the EIA report.

The is consolidating for a fourth day, following a sideways move on above 3.1 percent, for the fifth consecutive session.

Up Ahead

Market Moves

Stocks

Currencies

Bonds

Commodities

  • West Texas Intermediate crude climbed 0.2 percent to $72.09 a barrel, the highest level in a week.
  • fell 0.1 percent to $1,223.31 an ounce.



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