US futures
Dow futures +0.43% at 33086
S&P futures +0.45% at 4234
Nasdaq futures +0.46% at 14680
In Europe
FTSE -0.26% at 7350
Dax +0..07% at 14808
- US 10-year yields fall away from 5%
- Earnings come through thick & fast
- Alphabet & Microsoft report after the close
- Oil steadies after yesterday's losses
Yields ease lifting stocks
U.S. futures are rising on Tuesday capitalising on falling U.S. Treasury yields a day after the 10-year yield hit the 5% mark. Investors are also looking towards a slew of earnings, helping to keep the market buoyant ahead of mega caps Alphabet and Microsoft reporting after the close.
On the data front, attention will be on US PMI figures, which will provide further insight into the health of US economy. Expectations are for the services PMI to fall to 49.8 in October from 50.1 in September. Meanwhile, manufacturing PMI data is expected to fall to 49.5 from 49.8. The data comes ahead of tomorrow's Q3 GDP data, which is expected to accelerate to 4.3% and comes after Federal Reserve Chair Jerome Powell highlighted the strength of the US economy as a reason for the Fed to keep rates higher for longer.
Stronger-than-expected data could fuel bets that the Fed will keep interest rates elevated for an extended period, which could pull stocks lower again. Broadly speaking, the market is at a stage where good data is bad news because of what it means for rates.
Looking ahead, mega stocks Microsoft and Alphabet kick off big tech earnings, with Meta due tomorrow and Amazon on Thursday. The reports are particularly in focus given that these stocks, along with Nvidia, Apple, and Tesla, have driven a strong rally in the S&P 500 index, which still trades up around 10% this year. Any weakness in the data could leave the stock market vulnerable to falls.
Corporate news
Coca-Cola is set to rise after the soft drinks giant lifted its full-year profit forecast benefiting from strong demand even as it increased prices.
Spotify is set to open over 2% lower despite the streaming giant reporting quarterly monthly active users and subscriber numbers above forecasts. The stock trades 95% higher year to date, and investors could be seeing this is a profit booking opportunity.
General Electric is set to rise over 5% on the open after the conglomerate lifted its annual profit forecast thanks to strong demand for jet engine parts and services and the aviation sector's boom.
Coinbase rises over 8% after the cryptocurrency exchange benefited from the jump in Bitcoin to $35,000 on expectations that the Bitcoin ETF will be authorized by the US SEC soon.
S&P500 forecast – technical analysis.
The S&P500 has fallen below the 200 sma, falling briefly below the key support of 4200, the October low. The bullish RSI divergence could keep buyers hopeful of further upside. Buyers will need to rise above the 200 sma at 4250 to extend gains towards 4300 the round number and the 20 sma. Meanwhile, sellers could look for a move below 4200 and 4188 the October low to create a lower tow towards 4100.
FX markets –USD rises, EUR fall
The USD is recovering from a one-month low reached yesterday due to falling US bond yields. Instead, the greenback benefits from the weak eurozone economic data, which sent the euro sliding. Given the comparative strength of the US economy compared to the eurozone, any losses in the US dollar may be short-lived.
EUR/USD is falling after data showed that the eurozone business activity contracted at the fastest pace in three years, with the composite PMI falling to 46.5 in October, fueling recession worries. The data came after German consumer confidence also fell for a third straight month amid high food prices and elevated interest rates. Business activity in Germany, the eurozone's largest economy, also contracted for a fourth straight month.
GBP/USD is falling as investors digest UK jobs data and the latest PMI figures. While unemployment ticked lower to 4.2% The number of vacancies fell by 43,000. Separately UK business activity contacted for a third straight month as high interest rates and falling exports continued to hit the economy.
EUR/USD -0.28% at 1.0635
GBP/USD -0.13% at 1.2160
Oil steadies after steep losses
Oil prices are holding steady after falling quite sharply in the previous session.
Yesterday, oil prices fell over 2% as diplomatic efforts were stepped up in the Middle East to contain the conflict between Israel and Hamas The fact that Israel has held off so far on a ground assault on the Gaza Strip is an encouraging sign that has seen the risk premium on oil fall.
Today, both benchmarks are almost unchanged today as investors digest weaker-than-expected business activity in the eurozone and rising concerns that the region will be in a recession in the second half of this year.
Separately, the International Energy Agency said that it expected fossil fuel demand to peak by 2030 based on government policies.
WTI crude trades +0.19% at $85.45
Brent trades +0.16% at $89.07
Looking ahead
14:45 US PMIs
