Opening Bell: Earnings Expectations Drive Markets Higher; USD Extends Selloff
Investing.com | Oct 14, 2021 07:56AM ET
- Treasury yields fall for the third day,
- Market anomalies remain
- Bitcoin trades lower
- On Friday, Goldman Sachs (NYSE:GS). reports Q3 earnings.
- University of Michigan consumer sentiment is printed on Friday.
- On Friday US retail sales are published.
- The STOXX 600 rose 0.6%
- Futures on the S&P 500 rose 0.5%
- Futures on the NASDAQ 100 rose 0.7%
- Futures on the Dow Jones Industrial Average rose 0.4%
- The MSCI Asia Pacific Index rose 0.6%
- The MSCI Emerging Markets Index rose 0.6%
- The Dollar Index fell 0.1%
- The euro rose 0.1% to $1.1606
- The Japanese yen was little changed at 113.36 per dollar
- The offshore yuan was little changed at 6.4332 per dollar
- The British pound rose 0.2% to $1.3691
- The yield on 10-year Treasuries was little changed at 1.54%
- Germany’s 10-year yield was little changed at -0.13%
- Britain’s 10-year yield advanced one basis point to 1.10%
- WTI crude rose 1%
- Gold was up 0.1%
Key Events/h2
Futures contracts on the Dow, S&P, NASDAQ and Russell 2000 tracked a rally in European equities on Thursday as investors appeared to shrug off additional indications of rising inflation and instead focus on positive corporate earnings results.
Gold continued to trade higher.
Global Financial Affairs/h2
US futures extended a rebound after underlying gauges ended a three-day decline. It’s noteworthy that contracts on the Russell 2000 and the NASDAQ 100 outperformed futures on the S&P 500 and Dow Jones index.
We have been pointing out such anomalies in recent days. Yesterday, the same two outperformed despite concerns that inflationary pressure will dent the post-pandemic recovery. The sentiment seems to suggest that solid corporate earnings results are outweighing inflation worries.
In Europe, the STOXX 600 Index traded higher driven by the technology and mining sectors. Semiconductor stocks also outperformed amid a global hunger for chips, as manifested by Taiwan Semiconductor Manufacturing (NYSE:TSM), a Taiwanese chipmaker, which posted a 13.8% increase in quarterly profits.
Most of the markets in Asia were higher. The MSCI Asia Pacific excluding Japan rose 0.5%, South Korea’s KOSPI outperformed, adding 1.5%, closely followed by Japan’s Nikkei 225’s 1.46% climb. China’s Shanghai Composite retreated 0.1%, making it the only major regional index to close in the red, with property shares extending a selloff amid the Evergrande (HK:3333) fallout.
Economic data from China shows persistent inflation there. The annual producer prices rose in September at the quickest rate ever. This latest data was on the heels of data from the US on Wednesday which showed another strong increase in American consumer prices last month, coupled with the minutes from September’s Federal Reserve meeting in which members expressed rising anxiety about inflation.
Treasury yields on the 10-year note fell for the third straight day, as investors’ risk appetite grew.
The decline followed an Evening Star, a three-day reversal pattern. Rates are falling to the 200-DMA which may repeat a support. Such a patter could be the making of a H&S top. Meanwhile, the RSI is demonstrating weakening momentum, as it threatens a double top.
The dollar dropped for the second day, tracking falling yields.
The greenback failed to blow out a bullish pennant. The next test will be the lower half of the 93 levels, where a H&S top, which failed to provide bulls with the impetus to complete a massive double bottom, was situated. Meanwhile, the RSI peaked out with its own H&S top.
Gold, boosted by falling yields and a weakening dollar, rose for the third straight day.
The price finally completed a small H&S bottom. However, it appears to have found resistance below the 200-DMA, as well as the RSI. The small H&S makes up the right shoulder of a larger H&S bottom.
Bitcoin fell off daily highs, giving up the $58,000 level, which it visited earlier today for the first time since early May.
If prices close at these levels, the candle will have completed a bearish Shooting Star, which could also turn out to be the head of a small H&S top. The RSI is also showing signs of topping out.
Oil returned to its rally and traded above $81 for the first time since 2014.
Up Ahead/h2
Market Moves/h2 Stocks/h3
Currencies/h3
Bonds/h3
Commodities/h3
Stocks/h3
Currencies/h3
Bonds/h3
Commodities/h3
Bonds/h3
Commodities/h3
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.