US markets rally as earnings season takes centre stage

Stocks closed higher Monday as earnings season heats up this week.

Eleven per cent of the S&P 500 slated to report results. Some notable names on deck this week include Johnson & Johnson, Bank of America, Netflix and Tesla.

Those results follow a solid start to the reporting period. Brokerage Charles Schwab rallied more than 4 per cent on Monday after surpassing Wall Street expectations for earnings per share in the third quarter. JPMorgan Chase, Wells Fargo and UnitedHealth rose Friday after posting their latest quarterly results.

In further company news, unrelated to earnings season, Lululemon Athletica's stock surged over 10 per cent to reach a nearly two-year high as it was announced that the company would replace Activision Blizzard in the S&P 500 index on October 18, following Microsoft's acquisition of the video game publisher.

Ford's Chairman Bill Ford called on autoworkers to end a month-long strike, emphasising the potential threat to the company's future investments in vehicle development and factory expansion due to high labour costs, especially given Ford's large UAW workforce compared to its competitors.

LinkedIn is cutting about 668 roles across its engineering, product, talent and finance teams. These are the second such cuts this year as fewer companies use the hiring platform and corporate social network.

Umicore is building a 35 GWh battery materials plant in Ontario for the North American EV market, supported by significant funding from Canada and Ontario; the €1.27 billion project, inclusive of grants, aligns with Umicore's existing plans, with construction beginning later this year and production scheduled to start by late 2025, scaling up in 2026.

The Dow Jones Industrial Average traded 314.25 points higher, or 0.93% to close at 33,984.54, marking its best day since September. The S&P 500 climbed 1.06% to end the day at 4,373.63, while the Nasdaq Composite added 1.2% to 13,567.98.

Over the weekend, Israel’s military continued urging residents to evacuate northern Gaza amid a widely anticipated ground invasion. Secretary of State Antony Blinken promised U.S. support in a meeting with Israeli President Isaac Herzog on Monday.

The 10-year U.S. Treasury yield rose nearly 8 basis points to 4.712 per cent on Monday, while oil prices slipped as investors parsed the latest updates out of the war.

In commodity news, in response to the region's first cold spell, Germany has reactivated part of a previously mothballed coal plant, with a capacity of 500 megawatts, to help meet its energy needs during the winter months.

Peru's copper production continued to surge in August, increasing by 7.5 per cent compared to the previous year, as the country strives to maintain its position as a leading copper producer amid competition from Congo. Additionally, the Ministry of Energy and Mines reported growth in the production of various other minerals like gold, zinc, lead, iron, and tin in August, although silver and molybdenum production experienced declines during the same month.

Wall Street's leading banks, including JPMorgan and Citibank, predict the euro will reach parity with the US dollar due to concerns about rising energy costs and the eurozone's economic challenges, with JPMorgan downgrading its year-end euro forecast to $1 and Citibank targeting parity within six months, citing expectations of a European recession preceding the US.

Turning to US sectors, all closed higher overnight. Consumer Discretionary was the best performer, whilst Energy recorded the fewest gains.

Futures

The SPI futures are pointing to a 0.7 per cent gain.

Currency

One Australian dollar at 7:40 AM was buying 63.43 US cents.

Commodities

Gold lost 0.46 per cent. Silver fell 0.63 per cent. Copper added 0.24 per cent. Oil fell 0.70 per cent.

Figures around the globe

European markets closed higher. London’s FTSE gained 0.41 per cent, Frankfurt added 0.34 per cent, and Paris closed 0.27 per cent higher.

Turning to Asian markets, Tokyo’s Nikkei fell 2.03 per cent, Hong Kong’s Hang Seng lost 0.97 per cent while China’s Shanghai Composite closed 0.46 per cent lower.

The Australian share market closed 0.35 per cent lower at 7,026.55.

Ex-dividends

Horizon Oil (ASX:HZN) is paying 2 cents unfranked
WAM Capital (ASX:WAM) is paying 7.75 cents fully franked
WAM Leaders (ASX:WLE) is paying 4.5 cents fully franked

Dividends payable

Ambertech Ltd (ASX:AMO)
BlueScope Steel Ltd (ASX:BSL)
Finexia Financial Group Ltd (ASX:FNX)
Garda Property Group (ASX:GDF)
Qube Holdings Ltd (ASX:QUB)
SKS Technologies Group Ltd (ASX:SKS)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.
Disclaimer

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