Wednesday October 27th


Dow futures edge higher a day after hitting another record

U.S. stock index futures nudged higher during early morning trading on Wednesday after the Dow and S&P closed at record highs as earnings season continues. Futures contracts tied to the Dow Jones Industrial Average rose 33 points. S&P 500 futures were flat while Nasdaq 100 futures dipped 0.1%. Microsoft and Alphabet were among the headline reports after the bell Tuesday, with both topping revenue expectations. Microsoft shares rose 2.3% in premarket trading. General Motors shares fell more than 1% even after the industrial giant topped Wall Street’s earnings and revenue estimates for the third quarter. Boeing saw its stock rising slightly in premarket after the company reported better-than-expected free cash flow. The aircraft maker posted a wider-than-expected loss, however. Robinhood shares were getting slammed, down 11% the day after the trading app reported revenue well below expectations primarily due to weakness in crypto trading. On Tuesday, the Dow advanced roughly 15 points to end the day at an all-time high. It was the 30-stock benchmark’s third straight day of gains and fifth positive session in the last six. Earlier in the session the Dow had jumped about 150 points to also hit a record intraday high. The S&P gained 0.18% for its ninth positive session in the last ten, and also hit both a record intraday and closing high. It was the benchmark index’s 70th intraday high of 2021, and 57th record closing of the year. The Nasdaq Composite gained 0.06% for its third positive session in four. Facebook weighed on the tech-heavy index, with shares of the social media company dipping 3.9%. Texas Instruments shares tumbled 4% premarket after the company missed revenue estimates while Visa fell 2.5% despite beating on the top and bottom lines. Enphase Energy leaped 12.7% after reporting record revenue in face of supply chain headwinds. Coca-Cola rose 2.6% premarket after the company posted a beat on the top and bottom lines and raised its outlook, saying the business was getting stronger particularly in areas where the Covid recovery has been the best. “This earnings season has been about pricing momentum and whether consumers are able to handle surging costs,” noted Ed Moya, senior analyst at Oanda. “So far it seems the consumer can handle it,” he added. So far roughly 30% of the S&P 500 has reported earnings. Of the names that have posted quarterly updates, 82% have topped earnings expectations, while 80% have exceeded revenue estimates. Strong results have been key to pushing the major averages to new highs. “We see signs that there could be more gains to come in the final two months of the year,” said Ryan Detrick, chief market strategist for LPL Financial. “Seasonal tailwinds, improving market internals, and clear signs of a peak in the Delta variant all provide potential fuel for equities heading into year-end, and we maintain our overweight equities recommendation as a result.” Shares in Asia-Pacific were lower on Wednesday, with Chinese tech stocks in Hong Kong seeing big losses. The Hang Seng Tech index slipped 3.19% to 6,441.62. The broader Hang Seng index in Hong Kong led losses among the region’s major markets, falling 1.57% to close at 25,628.74. Mainland Chinese stocks declined on the day, with the Shanghai composite shedding 0.98% to 3,562.31 and the Shenzhen component falling 1.095% to 14,393.51. In Japan, the Nikkei 225 closed mildly lower at 29,098.24 while the Topix index shed 0.23% to finish the trading day at 2,013.81. South Korea’s Kospi also slipped 0.77%, closing at 3,025.49. Oil prices fell on Wednesday after industry data showed crude oil stockpiles rose more than expected and fuel inventories unexpectedly increased last week in the United States, the world’s largest oil consumer. Brent oil futures fell 25 cents, or 0.3%, to $86.15 a barrel after closing at the highest in seven years on Tuesday. West Texas Intermediate (WTI) futures declined 26 cents, or 0.3%, to $84.39 a barrel after gaining 1.1% in the previous session. Gold prices extended losses on Wednesday as firmer U.S. Treasury yields and expectations that the U.S. Federal Reserve and peers could finally announce the unwinding of economic support served to heap pressure on the metal. Spot gold fell 0.4% to $1,786.20 an ounce by 0852 GMT, making for a 1.6% decline since rallying to a more than one-month high last week. U.S. gold futures dropped 0.4% to $1,786.00.