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Futures Pointing To Modestly Higher Open On Wall Street
US Market
The major U.S. index futures are currently pointing to a modestly higher open on Tuesday, with stocks poised to add to the strong gains posted in the two previous sessions.
The markets may benefit from recent upward momentum, which has helped stocks recover from last week’s pullback due largely to late-day strength.
Trading activity is likely to remain somewhat subdued, however, as traders await the results today’s U.S. midterm elections.
The elections will determine control of Congress, with Republicans expected to take control of the House and possibly the Senate.
Traders are said to prefer a divided government, as times when the White House and Congress are controlled by opposite parties have historically been positive for Wall Street.
A looming report on consumer price inflation may also keep traders on the sidelines, as the data could have a significant impact on the outlook for interest rates.
Stocks turned in a lackluster performance for much of the trading day on Monday before rallying in the latter part of the session to add to the strong gains posted last Friday.
The Dow showed a notable move to the upside, ending the day up 423.78 points or 1.3 percent at 32,827.00, just shy of the two-month closing high set in late October.
The broader S&P 500 also jumped 36.25 points or 1.0 percent to 3,806.80, while the tech-heavy Nasdaq advanced 89.27 points or 0.9 percent to 10,564.52 after spending much of the session bouncing back and forth across the unchanged line.
The Dow benefited from a strong gain by Walgreens Boots Alliance (WBA), with the drugstore chain surging by 4.1 percent to its best closing level in almost three months.
The jump by Walgreens came after affiliate VillageMD agreed to acquire Summit Health-CityMD, a leading provider of primary, specialty and urgent care, for approximately $8.9 billion.
The broader markets benefited from late-day buying for the second straight session, with below average volume potentially exaggerating the upward move.
Earlier in the day, traders seemed reluctant to make significant moves ahead of the U.S. midterm elections on Tuesday and the release of consumer price inflation data on Thursday.
The midterm elections will determine whether Democrats maintain control of Congress, while the inflation data could impact the outlook for interest rates.
Economists expect a modest slowdown in the annual rate of consumer price growth, which could add to optimism about a slowdown in the pace of rate hikes.
Oil service stocks moved sharply higher on the day, driving the Philadelphia Oil Service Index up by 2.9 percent to a five-month closing high. The rally by oil service stocks came despite a decrease by the price of crude oil.
Significant strength also emerged among computer hardware and semiconductor stocks, with the NYSE Arca Computer Hardware Index and the Philadelphia Semiconductor Index surging by 2.4 percent and 2.2 percent, respectively.
Transportation stocks also turned in a strong performance on the day, resulting in a 2.0 percent jump by the Dow Jones Transportation Average.
Tobacco, oil producer and gold stocks also showed notable moves to the upside, while considerable weakness remained visible among steel and utilities stocks.
U.S. Economic Reports
The Treasury Department is scheduled to announce the results of this month’s auction of $40 billion worth of three-year notes at 1 pm ET.
Stocks in Focus
Shares of Lyft (LYFT) are moving sharply lower in pre-market trading after the ride-hailing service reported better than expected third quarter earnings but disappointing revenue and ridership numbers.
Videogame publisher Take-Two Interactive (TTWO) is also likely to come under pressure after reporting fiscal second quarter results that missed analyst estimates and lowered its full-year bookings guidance.
On the other hand, shares of Lordstown Motors (RIDE) are seeing significant pre-market strength on news contract manufacturer Foxconn will invest as much as $170 million in the electric vehicle maker.
Industrial materials maker DuPont (DD) may also move to the upside after reporting third quarter results that beat analyst estimates on both the top and bottom lines.
Europe
European stocks are seeing modest strength on Tuesday as investors look towards the U.S. midterm elections. Analysts expect a Republican victory, which could change the political climate.
The markets may benefit from recent upward momentum, which has helped stocks recover from last week’s pullback due largely to late-day strength.
Trading activity is likely to remain somewhat subdued, however, as traders await the results today’s U.S. midterm elections.
The elections will determine control of Congress, with Republicans expected to take control of the House and possibly the Senate.
Traders are said to prefer a divided government, as times when the White House and Congress are controlled by opposite parties have historically been positive for Wall Street.
A looming report on consumer price inflation may also keep traders on the sidelines, as the data could have a significant impact on the outlook for interest rates.
Danish jewelry maker Pandora has moved sharply higher after its third-quarter sales topped estimates.
3i Infrastructure has also jumped after reporting improved earnings in the first half of the year.
Associated British Foods has also surged. After reporting a jump in annual profits, the Primark owner has announced a £500 million share buy-back program for the current financial year.
Hammerson has also rallied. The British retail property firm said that footfall at its Irish flagships improved to 90 percent of 2019 levels in the third quarter of the year.
Schaeffler AG, a maker of rolling element bearings for industries, has also soared after saying that it is axing 1,300 jobs globally to rein in fixed costs and reduce overcapacity.
Meanwhile, miners Anglo American, Antofagasta and Glencore have fallen on reports of increased coronavirus cases in Guangzhou and other Chinese cities. Oil & gas firm BP Plc and Shell have also declined.
French luxury giants LVMH and Hermes International have also moved to the downside on China demand concerns.
Carrefour has also fallen after the retail giant said it would step up its expansion in e-commerce, open more discount stores and cut costs as part of a new strategic plan.
German pharmaceutical and life sciences firm Bayer has also slumped after its earnings narrowly topped estimates.
Asia
Asian stocks ended Tuesday’s session on a mixed note amid concerns about the fate of China’s zero-COVID policy and ahead of U.S. consumer inflation data due on Thursday that could influence the Federal Reserve’s rate-hike narrative.
The dollar held steady as Americans head to the polls to determine which party will be in control of the U.S. Congress. Gold slipped on dollar strength, while oil prices were little changed as investors weighed supply worries against recession fears.
China’s Shanghai Composite Index dropped 0.4 percent to 3,064.49 as the country grappled with its worst COVID-19 outbreak since May.
New coronavirus cases surged in Guangzhou and other Chinese cities, preventing the country from stamping out the virus and relaxing controls.
China’s foreign exchange reserves rose nearly 0.8 percent in October from the previous month as the U.S. dollar weakened, according to data released by the State Administration of Foreign Exchange.
Hong Kong’s Hang Seng Index slipped 0.2 percent to 16,557.31, wiping out morning gains.
Japanese shares rallied to close near eight-week highs, with chip-related and other tech stocks leading the surge. The Nikkei 225 Index jumped 1.3 percent to 27,872.11, marking its highest close since September 15. The broader Topix ended 1.2 percent higher at 1,957.56.
Sony, Advantest, Tokyo Electron and Screen Holdings all rose about 3 percent, while heavyweight SoftBank Group soared 5 percent.
Toshiba gave up 1.8 percent on a Nikkei report that private equity fund Japan Industrial Partners has submitted a bid to buy the conglomerate for $15 billion that lacks key commitments from banks.
Seoul stocks advanced on hopes of easing Fed policy. The Kospi climbed 1.2 percent to 2,399.04 – extending gains for a third straight session.
Samsung Electronics, Kakao and Naver jumped 3-5 percent, while Posco Chemical and LG Chem lost 1-2 percent.
Australian markets finished modestly higher despite weak readings on consumer sentiment and business confidence. The benchmark S&P ASX 200 Index rose 0.4 percent to 6,958.90 while the broader All Ordinaries Index closed 0.3 percent higher at 7,150.10.
Commodities
Crude oil futures are slipping $0.35 to $91.44 a barrel after falling $0.82 to $91.79 a barrel on Monday. Meanwhile, after inching up $3.90 to $1,680.50 an ounce in the previous session, gold futures are edging down $3.80 to $1,676.70 an ounce.
On the currency front, the U.S. dollar is trading at 146.41 yen compared to the 146.63 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $0.9994 compared to yesterday’s $1.0020.
