15.10.2024 - European stocks and US futures edged lower as a steep drop in crude oil prices dragged down energy shares after concerns eased about Israel attacking Iranian energy facilities. The Stoxx 600 index was down 0.2%, reversing an earlier gain. TotalEnergies SE dropped 4.2% and BP Plc was down 4.4%. Brent crude futures plunged below $75 a barrel after the Washington Post reported that Israel doesn’t plan on striking Iranian oil or nuclear plants. Meanwhile, the International Energy Agency projected a supply glut next year. US equity futures were trading lower after the S&P 500 hit its 46th record high of 2024. Nasdaq 100 contracts were down 0.2%. Nvidia Corp. and Advanced Micro Devices Inc. fell in premarket trading after Bloomberg reported that Biden administration officials have discussed capping sales of advanced AI chips to some countries.
With earnings poised to drive US sentiment this week, investors appear not to be deterred by reduced profit forecasts and are instead betting on positive surprises. Reports due today include Citigroup Inc., Goldman Sachs Group Inc. and Bank of America Corp. Nathan Thooft, chief investment officer and senior portfolio manager at Manulife Investment Management, expects earnings season to be pretty good, partly because expectations have been lowered. “Consensus is around 4% year-over-year. It’s a fairly low bar,” he said.
The US earnings season unofficially kicked off on Friday, led by financial bellwethers JPMorgan Chase & Co. and Wells Fargo & Co. On top of other big banks reporting this week, traders will be paying close attention to results from key companies like Netflix Inc. and JB Hunt Transport Services Inc. An initial round of third-quarter financial results last week showed Corporate America is benefitting from lower rates early into the Federal Reserve’s easing cycle, according to Bank of America Corp. strategists including Ohsung Kwon and Savita Subramanian. Among individual movers in Europe, Ericsson AB shares rose to the highest level in two years after the telecom equipment company’s deal with AT&T Inc. pushed earnings higher. European beauty stocks like LVMH, L’Oreal SA, Puig Brands SA were also trading lower on Tuesday after US outfit Coty Inc. lowered its sales-growth guidance overnight.
Meanwhile, shares in China and Hong Kong slid, with investors on the watch for further stimulus from the Chinese government. Equity benchmarks in the country had risen on Monday even after a highly anticipated Finance Ministry weekend briefing lacked specific new incentives to boost consumption in the world’s biggest crude importer. The yen was the best performer among G-10 currencies and remained not far from 150 versus the dollar, a key psychological level with a risk of intervention in focus for investors.
With earnings poised to drive US sentiment this week, investors appear not to be deterred by reduced profit forecasts and are instead betting on positive surprises. Reports due today include Citigroup Inc., Goldman Sachs Group Inc. and Bank of America Corp. Nathan Thooft, chief investment officer and senior portfolio manager at Manulife Investment Management, expects earnings season to be pretty good, partly because expectations have been lowered. “Consensus is around 4% year-over-year. It’s a fairly low bar,” he said.
The US earnings season unofficially kicked off on Friday, led by financial bellwethers JPMorgan Chase & Co. and Wells Fargo & Co. On top of other big banks reporting this week, traders will be paying close attention to results from key companies like Netflix Inc. and JB Hunt Transport Services Inc. An initial round of third-quarter financial results last week showed Corporate America is benefitting from lower rates early into the Federal Reserve’s easing cycle, according to Bank of America Corp. strategists including Ohsung Kwon and Savita Subramanian. Among individual movers in Europe, Ericsson AB shares rose to the highest level in two years after the telecom equipment company’s deal with AT&T Inc. pushed earnings higher. European beauty stocks like LVMH, L’Oreal SA, Puig Brands SA were also trading lower on Tuesday after US outfit Coty Inc. lowered its sales-growth guidance overnight.
Meanwhile, shares in China and Hong Kong slid, with investors on the watch for further stimulus from the Chinese government. Equity benchmarks in the country had risen on Monday even after a highly anticipated Finance Ministry weekend briefing lacked specific new incentives to boost consumption in the world’s biggest crude importer. The yen was the best performer among G-10 currencies and remained not far from 150 versus the dollar, a key psychological level with a risk of intervention in focus for investors.
