Good corporate earnings push major US and European indices to new highs

The US stock market closed yesterday in the green zone thanks to strong corporate earnings results. The Dow Jones index increased by 0.18% yesterday and hit another price high. The S&P 500 added 0.47%, and the Nasdaq index gained 0.90%.

Among the S&P 500 index components, the top gainers were Tesla Inc. shares, which jumped by 12.66%. For the first time, Tesla's capitalization exceeded $1 trillion, surpassing Facebook, which gained 2.5% on the report.

On the other hand, options trading statistics show that options traders are getting bearish on tech stocks. With inflation expectations on the rise and in anticipation of the Fed's QE program being cut, the stock market may face a strong sell-off in early November.

European stock indices were mostly growing yesterday. British FTSE 100 added 0.25%, German DAX increased by 0.36%, Italian FTSE MIB added 0.92%, Spanish IBEX 35 increased by 0.16%. French CAC 40 became an exception with a decrease of 0.31%. The business climate index in Germany continues to decline. The Ifo Institute data indicates that the index was 97.7 (forecast 98.2, previous was 98.9). Germany's economic growth is likely to slow significantly in Q4. Expectations that the ECB will ignore market inflation forecasts and a weak German sentiment survey on Monday had a negative impact on the euro.

WTI crude oil prices hit $85 per barrel yesterday for the first time since October 2014 but went down slightly by the end of the trading session. On the contrary, the natural gas prices added more than 9% yesterday. Supply shortages are still affecting energy prices, and the trend is likely to continue for the rest of the year.

December Gold futures increased by 0.65% yesterday and reached $1,808.05 per troy ounce. But on the eve of the quantitative easing cuts, traders should not expect gold prices to rise strongly.

Most Asian stocks increased on Tuesday after the S&P 500 closed with a record high as corporate earnings and modest progress on China-US relations added to investor sentiment, even as inflation fears intensified. On Tuesday, Japan's Nikkei 225 added 1.14%, while Australia's ASX 200 increased by 0.2%. The Hang Seng index and China's benchmark CSI 300 index opened higher but fell into negative territory due to real estate stocks.

China's steel production fell by 17% compared to last year. China plans to cap coal prices due to the energy crisis. Australia's trade minister said the country is ready to supply coal to China.

Main market quotes:

S&P 500 (F) 4,566.48 +21.58 (+0.47%)

Dow Jones 35,741.15 +64.13 (+0.18%)

DAX 15,599.23 +56.25 (+0.36%)

FTSE 100 7,222.82 +18.27 (+0.25%)

USD Index 93.81 +0.20 (+0.21%)

Important events for today:
  • – US CB Consumer Confidence (m/m) at 17:00 (GMT+3);
  • – US New Home Sales (m/m) at 17:00 (GMT+3).

by Justforex, 2021.10.26

We advise you to get acquainted with the daily forecasts for the major currency pairs.

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

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