Upbeat Earnings News May Contribute To Strength On Wall Street

The major U.S. index futures are currently pointing to initial strength on Wall Street on Tuesday, with stocks likely to move mostly higher following the mixed performance seen on Monday.

The markets may benefit from a positive reaction to the latest batch of earnings news, as a number of big-name companies reported better than expected quarterly results.

Shares of General Electric (GE) are moving sharply higher in pre-market trading after the conglomerate reported third quarter results that exceeded analyst estimates and raised its full-year guidance.

Diversified manufacturer 3M Co. (MMM) is also seeing notable pre-market strength after reporting better than expected third quarter results and boosting its full-year profit forecast.

Shares of Coca-Cola (KO) are also likely to move to the upside after the beverage giant reported third quarter results that beat expectations and raised its full-year forecast.

However, overall trading activity may be somewhat subdued as traders look ahead to release of quarterly results from tech giants Alphabet (GOOGL) and Microsoft (MSFT) after the close of trading.

Traders may also be reluctant to make significant moves amid a lack of major U.S. economic data, with several key reports due to be released in the coming days.

Stocks recovered from an initial move to the downside but gave back ground in the latter part of the trading session on Monday. The major averages eventually ended the day mixed, with the Dow and the S&P 500 falling to their lowest closing levels in over four months.

While the tech-heavy Nasdaq rose 34.52 points or 0.3 percent to 13,018.33, bouncing off a nearly five-month intraday low, the S&P 500 dipped 7.12 points or 0.2 percent to 4,217.04 and the Dow fell 190.87 points or 0.6 percent to 32,936.41.

Stocks initially came under pressure as treasury yields rebounded amid ongoing concerns about the outlook for interest rates.

Following the pullback seen last Friday, the yield on the benchmark ten-year note moved back to the upside, briefly peeking above the key 5 percent level.

The subsequent recovery on Wall Street came as treasury yields turned lower as the day progressed, with the ten-year yield falling into negative territory.

Treasury yields turned lower after Pershing Square’s Bill Ackman said in a post on X, formerly known as Twitter, the hedge fund management company has “covered our bond short.”

“There is too much risk in the world to remain short bonds at current long-term rates,” Ackman added. “The economy is slowing faster than recent data suggests.”

Overall trading activity remained somewhat subdued, however, with a lack of major U.S. economic data likely keeping some traders on the sidelines.

On Friday, the Commerce Department is due to release its report on personal income and spending, which includes readings on inflation said to be preferred by the Federal Reserve.

Traders are also likely to keep an eye on reports on new home sales, durable goods orders, pending home sales and initial jobless claims in the coming days.

The earnings season also continues to pick up steam this week, with a slew of big-name companies due to report their quarterly results.

A steep drop by shares of Chevron (CVX) weighed on the Dow, with the energy giant tumbling by 3.7 percent after announcing an agreement to acquire smaller rival Hess (HES) in an all-stock transaction valued at $53 billion.

Semiconductor giant Intel (INTC) also came under pressure after a report from Reuters said Nvidia (NVDA) has quietly begun designing central processing units that would run Microsoft’s (MSFT) Windows operating system and use technology from Arm Holdings (ARM).

Tobacco stocks showed a substantial move to the downside on the day, dragging the NYSE Arca Tobacco Index down by 1.7 percent to its lowest closing level in a year.

Considerable weakness was also visible among transportation stocks, as reflected by the 1.5 percent drop by the Dow Jones Transportation Average.

Oil, networking and biotechnology stocks also saw significant weakness, while some strength was visible among airline stocks.

Commodity, Currency Markets

Crude oil futures are inching up $0.15 to $85.64 a barrel after plunging $2.59 to $85.49 on Monday. Meanwhile, after slipping $6.60 to $1,987.80 an ounce in the previous session, gold futures are falling $10.10 to $1,977.70 an ounce.

On the currency front, the U.S. dollar is trading at 149.79 yen compared to the 149.71 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.0624 compared to yesterday’s $1.0670.

Asia

Asian stocks recovered from an early slide to end mostly higher on Tuesday as bond yields eased and reports emerged that the U.S. is pressing Israel to delay its ground offensive in the Gaza Strip to allow time for the release of hostages and shipments of aid into Gaza.

The dollar fell against major currencies, helping gold prices push higher. Oil recovered some ground after falling sharply on Monday.

China’s Shanghai Composite Index climbed 0.8 percent to 2,962.24 after China’s sovereign wealth fund bought exchange-traded funds in a bid to boost the country’s slumping stock market.

Hong Kong’s Hang Seng Index fell 1.1 percent to 16,991.53 after reports of a series of arrests and an investigation into major Apple supplier Foxconn.

Japanese shares ended slightly higher even as flash estimates by the au Jibun bank showed business activity in the country contracted in October for the first time since December 2022.

The Nikkei 225 Index rose 0.2 percent to 31,062.35, snapping three sessions of losses. The broader Topix Index finished little changed with a positive bias at 2,240.73.

Heavyweights Fast Retailing and SoftBank Group climbed around 1.7 percent each. Electric motor maker Nidec slumped 10.5 percent after its quarterly earnings missed estimates.

Seoul stocks rallied as U.S. Treasury yields eased after soaring in the past few days. The Kospi jumped 1.1 percent to 2,383.51 led by bio and IT stocks. SK Hynix, Celltrion, Kakao, Naver and Samsung Biologics soared 2-7 percent.

Australian markets snapped a three-day losing streak as strong gains among commodity stocks offset declines in healthcare and consumer sectors.

The benchmark S&P/ASX 200 Index edged up 0.2 percent to 6,856.90 ahead of quarterly inflation data due on Wednesday. The broader All Ordinaries Index settled 0.2 percent higher at 7,045.60.

Rare earths giant Lynas surged 12.4 percent after Malaysia allowed the company to import radioactive raw material until March 2026.

Across the Tasman, New Zealand’s benchmark S&P/NZX 50 Index slipped 0.3 percent to 10,960.62 as traders returned to their desks after a long holiday weekend.

Europe

European stocks are mostly higher on Tuesday as bond yields eased and investors looked ahead to earnings reports from tech giants, including Microsoft Corp., Alphabet Inc. and Amazon.com, later this week for direction.

The euro traded lower after a survey showed Eurozone business activity took a surprise turn for the worse this month.

The HCOB’s flash euro zone Composite Purchasing Managers’ Index (PMI), compiled by S&P Global, dropped to 46.5 in October from September’s 47.2 – hitting its lowest since November 2020.

German consumer confidence weakened for a third consecutive month in November and contraction persisted in the U.K.’s private sector for a third consecutive month, while the U.K.’s jobless rate was unchanged in the three months to August, separate reports showed.

The pan European STOXX 600 is up by 0.1 percent after closing 0.1 percent lower on Monday. The French CAC 40 Index is up by 0.5 percent and the German DAX Index is up by 0.2 percent, although the U.K.’s FTSE 100 Index has edged down by 0.1 percent.

Swiss computer parts maker Logitech International has moved sharply higher after raising its full-year guidance.

Puma shares have also surged after the German sportswear brand stood by its full-year profit outlook.

Birkin bag maker Hermes has also moved to the upside in Paris after its third-quarter sales beat expectations.

Meanwhile, Barclays has slumped after the British lender warned of margin pressure and hinted at major cost cutting later this year.

Distribution services giant Bunzl has also tumbled after revenue for the third quarter fell 4.8 percent at constant exchange rates.

U.S. Economic Reports

The Treasury Department is scheduled to announce the results of this month’s auction of $51 billion worth of two-year notes at 1 pm ET.

Stocks In Focus

Shares of RTX Corp. (RTX) are moving sharply higher in pre-market trading after the aerospace and defense company reported third quarter results that beat analyst estimates on both the top and bottom lines.

Sports betting company DraftKings (DKNG) may also see initial strength after MoffettNathanson upgraded its rating on the company’s stock to Buy from Neutral.

On the other hand, shares of Monster Beverage (MNST) may move to the downside after Piper Sandler downgraded its rating on the energy drink maker to Neutral from Overweight.