Key Events
Futures on the S&P 500, Dow and NASDAQ 100, as well as European shares, inched steadily higher this morning as investors remained laser-focused on positive earnings reports, brushing aside less rosy economic data from both Europe and Asia—which set a somber tone for U.S. figures coming up later today.
The euro-area economy remained near contraction territory, with the region's manufacturing PMI shrinking for a ninth straight month. Japan’s PMI also underwhelmed, dropping the most in three years, while Australian numbers hit an all-time low.
The STOXX 600 opened higher with every major benchmark in the green, creating a breakaway gap that included a potential upside breakout of a bullish pennant. However, similarly to what happened on the S&P 500, the retreat exposed resistance at the top of a massive broadening pattern—a formation that tends to develop at market tops amid a lack of market leadership.
The pan-European index then continued to climb with the help of bullish corporate results from markets heavyweights including Daimler (DE:DAIGn) and BASF (DE:BASFN). If it closes off its highs, it will have created a shooting star, underpinning tensions between the pennant bulls and the long-term top pattern since March.
Meanwhile, the pound retreated as traders nervously awaited the E.U.'s decision on granting a Brexit deadline extension to the U.K. Technically, the currency trends within a potential falling flag, bullish after the 6% jump earlier in the month.
Earlier, Asian indices mostly advanced, with Hong Kong’s Hang Seng (+0.87%) outperforming on stimulus expectations, after the city's legislature formally abandoned its infamous extradition bill. China’s Shanghai Composite (-0.02%) was flat.
Global Financial Affairs
Yesterday, U.S. equities benefited from some upbeat company announcements, with the S&P 500 returning above the key 3,000.
Apple (NASDAQ:AAPL) (+1.34%) set a new record, closing at the top of the session after Morgan Stanley raised the company's share target. Boeing (NYSE:BA) (+1.04%) led the Dow Jones Industrial Average (0.17%) higher, after reporting a dramatic increase in 737 Max plane’s output.
Tesla (NASDAQ:TSLA) surged after hours as the company turned a surprise profit. PayPal (NASDAQ:PYPL) beat revenue forecasts while Microsoft (NASDAQ:MSFT) exceeded both EPS and revenue expectations. Ford Motor (NYSE:F) and eBay(NASDAQ:EBAY) also beat forecasts, though the former posted weak guidance and the latter published disappointing revenue projections.
Manufacturing giant Caterpillar (NYSE:CAT)’s missed on both metrics, citing economic uncertainty for a decline in costumer purchases. However, it was still rewarded by investors for its decision to cut production—which pushed the group's shares 1.23% higher, to a peak since July 23.
Conversely, the Philadelphia Semiconductor Index tumbled almost 2% on the continued downward effect of Texas Instruments's (NASDAQ:TXN) reduced fourth-quarter forecast.
Overall, investors are grappling with mainly positive earnings on the one hand and weakening economic data, compounded by some gloomy corporate warnings, on the other.
In commodities, oil gave up gains that had been sparked by an unexpected drop in crude inventories on Wednesday.
Up Ahead
- {erl-6435||Amazon.com}} (NASDAQ:AMZN) reports after market close on Thursday, with analysts expecting that higher costs could hurt profitability in the short term.
- The U.S. manufacturing PMI is coming up at 9:30am ET.
Market Moves
Stocks
- The U.K.’s FTSE 100 gained 0.2%.
- The MSCI Asia Pacific Index ticked 0.4% higher.
- The MSCI Emerging Market Index climbed 0.3%.
Currencies
- The Dollar Index was little changed.
- The euro advanced 0.1% to $1.1137.
- The British pound climbed 0.2% to $1.2932.
- The Japanese yen was little changed at 108.65 per dollar.
Bonds
- The yield on 10-year Treasurys fell two basis points to 1.75%.
- Germany’s 10-year yield slid one basis point to -0.40%.
- Britain’s 10-year yield declined one basis point to 0.679%.
Commodities
- Gold was little changed at $1,491.80 an ounce.
- West Texas Intermediate crude declined 0.6% to $55.64 a barrel.