The S&P 500 is poised to edge closer to an all-time high as traders weigh the prospect of solid results in a busy week for corporate earnings against the risk of escalating tensions in the Middle East.
S&P 500 contracts rose 0.1% after the index ended last week just shy of a record. Brent crude swung between gains and losses amid resilient flows from the Persian Gulf and concerns over repeated Houthi attacks on Saudi Arabia · from neighboring Yemen. Traders were also assessing · President Donald Trump’s claim of an “energy ceasefire” between Russia and Ukraine.
Treasury futures were little changed, with the cash market closed for Columbus Day in the US. Bond yields fell slightly across Europe and Asia. The dollar barely budged. Bitcoin held gains following a three-day rebound, while crypto-related stocks outperformed in early US trading.
Wall Street’s biggest banks are expected to unveil a quarterly stock-trading haul of $19 billion when the likes of JPMorgan Chase & Co. and Citigroup Inc. unofficially kick off the earnings season on Tuesday. Artificial-intelligence heavyweights will come under the spotlight later in the week when ASML Holding NV in Europe and Taiwan Semiconductor Manufacturing Co. report.
Goldman Sachs Group Inc. strategists including Christian Mueller-Glissman said the team turned overweight stocks for three months on expectations for strong earnings growth and a recent valuation derating.
“Double-digit earnings growth has so far helped offset the negative impact of higher rates,” said Vincent Juvyns, chief investment strategist at ING in Brussels. “The earnings season will be important in determining whether the bull market has further room to run.”
Traders are banking on an uplift from earnings after weeks of elevated oil prices and global bond yields at their highest levels in decades. Inflation data and a scheduled speech by Federal Reserve Chair Kevin Warsh will also inform expectations for the interest-rate path at a time when money markets are pricing another US rate hike by December.
The closely watched consumer price index is seen rising 0.6% in September after a 0.4% increase a month earlier, based on the median projection in a Bloomberg survey. That would mark the largest advance in five months. Excluding fuel and food, the so-called core measure probably rose 0.2%, a step down from August.
“The contrast between a fuel-driven headline acceleration and a softer underlying core print will clearly be important for the Fed, particularly given recent messaging that further tightening may be needed but is not urgent,” noted Jim Reid, global head of macro research at Deutsche Bank AG.
What Bloomberg’s Strategists Say...
“US equities are primed to make fresh highs this week as financials kick off third-quarter earnings season. Rising rates are placing a higher hurdle that most stocks are failing to clear, yet robust tech results should keep headline index momentum intact.”
— David Savage, Macro Squawk. Click here for the full analysis.
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Some of the main moves in markets:
Stocks
- The Stoxx Europe 600 rose 0.4% as of 10:11 a.m. London time
- S&P 500 futures were little changed
- Nasdaq 100 futures were little changed
- Futures on the Dow Jones Industrial Average were little changed
- The MSCI Asia Pacific Index fell 0.4%
- The MSCI Emerging Markets Index fell 0.7%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at $1.1192
- The Japanese yen was little changed at 158.46 per dollar
- The offshore yuan was little changed at 6.6943 per dollar
- The British pound was little changed at $1.3239
Cryptocurrencies
- Bitcoin fell 0.1% to $83,493.13
- Ether rose 0.6% to $2,551.82
Bonds
- The yield on 10-year Treasuries was little changed at 5.24%
- Germany’s 10-year yield declined one basis point to 3.47%
- Britain’s 10-year yield declined two basis points to 5.43%
Commodities
- Brent crude rose 1% to $105.72 a barrel
- Spot gold fell 0.4% to $4,177.04 an ounce
This story was produced with the assistance of Bloomberg Automation.