Wall Street is predicted to see a slight decline on Tuesday as European markets rise. Investors are awaiting Alphabet’s earnings and critical US job creation data. Futures indicate drops for major US indexes. Meanwhile, European stocks are boosted, particularly by the banking sector following HSBC’s strong quarterly results. Additionally, bond yields are rising amid speculation about the US presidential election, while oil prices show signs of recovery after a recent drop.
by Pauline Foret
(Reuters) – Wall Street is projected to experience a slight decline on Tuesday, as European stock markets continue to rise during the midday session. Investors are eagerly anticipating earnings reports from major tech companies, particularly Google’s parent company, Alphabet, alongside significant job creation data from the US.
Futures for New York indices suggest a reduced opening on Wall Street, with the Dow Jones expected to drop by 0.35%, the S&P 500 by 0.15%, and the Nasdaq by 0.02%.
In Paris, the CAC 40 index has risen by 0.14%, reaching 7,567.58 points around 12:04 GMT. Meanwhile, Frankfurt’s DAX is up by 0.14%, while London’s FTSE 100 has fallen by 0.05%.
The EuroStoxx 50 index increased by 0.11%, FTSEurofirst 300 by 0.04%, and the Stoxx 600 by 0.02%.
As the corporate earnings season progresses, investors are focused on the results from the ‘Magnificent Seven’ — the largest US companies by market capitalization. Alphabet will kick off earnings announcements today, followed by Meta and Microsoft on Wednesday, and Apple and Amazon on Thursday.
Expectations are high for Google’s results, which are poised to set the tone for the financial performance of other tech giants that play a significant role in the S&P 500.
Additionally, this afternoon will see the release of the “JOLT” report, providing insights into job creation in the US and serving as one of the Federal Reserve’s key indicators for evaluating the employment landscape in the world’s leading economy.
In the political arena, the US presidential race is heating up, with many betting markets favoring a Donald Trump victory paired with a Republican majority in Congress. However, polling suggests the outcome may be closely contested.
“The markets are displaying a positive sentiment and appear resilient to event-related risks,” noted Kathleen Brooks, head of research at XTB.
European stock markets remain in the green, primarily driven by the banking sector following HSBC’s better-than-expected performance in the third quarter and the announcement of a share buyback program.
STOCKS TO MONITOR ON WALL STREET
Pfizer has increased its full-year profit forecast due to stronger-than-anticipated sales of its COVID-19 treatment.
In contrast, McDonald’s reported a sharper-than-expected drop in its global like-for-like quarterly sales on Tuesday, impacted by reduced customer traffic in key markets.
EUROPEAN STOCKS UPDATE
Across the Atlantic, HSBC shares surged by 4.4% after exceeding expectations for the third quarter.
On the downside, BP’s shares fell by 2.2% following the announcement of the company’s weakest profit in four years.
Novartis’ stock declined by 3.3%, even as the Swiss pharmaceutical firm raised its annual outlook for the third time this year.
BOND YIELDS
Fueled by speculation surrounding a potential Donald Trump presidency, bond yields are experiencing an upward trend on Tuesday.
The yield on ten-year US Treasuries rose 1.8 basis points to 4.2962%, while the two-year yield increased by 0.3 basis points to 4.1435%.
German bond yields mirrored this trend as investors await crucial economic indicators later in the week, with the yield on ten-year German Bund climbing by 3.0 basis points to 2.3150%, and the two-year yield advancing by 1.9 basis points to 2.1490%.
CURRENCY MOVEMENTS
The US dollar is gaining ground on Tuesday amid speculation regarding the presidential election, recent economic reports, and political instability in Japan, where the ruling coalition lost its parliamentary majority in recent elections. The dollar is up by 0.08% against a basket of major currencies.
The euro is down 0.12%, trading at $1.0799, while sterling is showing signs of strength, rising 0.08% against the dollar and 0.18% against the euro.
OIL MARKET
Oil prices are rebounding on Tuesday after a 6% drop the previous day, supported by the US decision to purchase oil for the Strategic Petroleum Reserve (SPR), though concerns about weak demand persist.
Brent crude rose by 1.29%, reaching $72.34 a barrel, while US light