Opening Bell: Earnings, Trade Hopes Boost Futures; Safe Havens Slip

 | Oct 30, 2018 06:30

  • Global stocks, futures rebound as investors focus on earnings and hopes of trade war resolution
  • Safe haven yen, gold and US Treasurys drop on improved sentiment
  • Dow and S&P 500 flirt with correction territory, but close above threshold
    • h2 Key Events/h2

    European shares built on yesterday’s regional advance this morning while futures for the S&P 500, Dow and NASDAQ 100 took their cues from an Asian stock rebound earlier today, as market focus shifted to the positive outlook posted by corporate earnings results, as well as a potential trade deal on the horizon between the world’s two largest economies.

    US futures contracts jumped after US President Donald Trump hinted to "a great deal with China," which was enough to reverse the selling that had ensued after reports that Washington was preparing to announce tariffs on all remaining Chinese imports by early December, if talks between the two countries failed to come to an acceptable agreement.

    The STOXX Europe 600 opened higher on earnings beats from some marquee companies such as BP (LON:BP) and Volkswagen (DE:VOWG_p).

    Earlier, during the Asian session, the MSCI Asia Pacific Index found its footing after a five-day slide, though it still closed 0.19 percent in negative territory. Japan’s Nikkei 225 outperformed with a 1.44 percent gain, helped by a weaker yen. Hong Kong’s Hang Seng underperformed, dropping 0.91 percent on lingering trade war worries and earnings weakness.

    h2 Global Financial Affairs/h2

    During yesterday's US session, stocks continued to slide, with both the S&P 500 and the Dow flirting with a correction, amid the steepest monthly declines in ten years.

    The SPX slipped 0.66 percent after rebounding from a 2.07 percent loss, reaching an aggregate decline of over 11 percent from its most recent peak, taking it well into correction territory. However, the index managed to trim losses in the final 15 minutes of the session, crawling above the 10-percent decline mark, finishing 9.88 percent below its top.

    Losses were led by Energy (-1.87 percent), Technology (- 1.69 percent) and Communication Services (-1.55 percent) stocks, but were offset by gains in Real Estate (+1.65 percent), Utilities (+1.41 percent) and Consumer Staples (+1.15 percent).

    The Dow Jones Industrial Average edged 0.99 percent lower, though also rebounding from a 2.28 percent intraday drop of more than 500 points, for an 11 percent decline from the mega cap index's October 3 peak. After paring the drop, it closed 8.92 percent from the top, managing to climb above correction territory.

    The tech-heavy NASDAQ Composite underperformed, as the rout in tech shares continued. The index gave up 1.63 percent. The small cap Russell 2000 outperformed, dropping only 0.51 percent.

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