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Strong earnings from Amazon & Intel pull US equity futures up; Sentiment remains cautious; Focus on today's PCE data

Olusegun Enujowo


Earnings reports remain the main driving factor. Companies reflect on consumer demand and deteriorating economic / macro conditions. Geopolitical developments keep investors on edge as well with the current conflict in the Middle East and increasing tension between Iran and the US. Crude oil rose as the US carried out attacks on Iran-linked facilities in Syria.

In Europe, the Stoxx Europe 600 is relatively unchanged (+0.1%), with media stocks slipping and oil and gas on the rise. Earnings continue to play a pivotal role in market movements. Sharp losses of Sanofi weighs on the CAC 40 - trading at -16%, the worst day in 29 years. The pharmaceutical giant warned that it expects business earnings for next year to be hit by its plans to boost investment in research and development and changes in global tax regulations. We see France's consumer confidence for October stand at 84 against an expected 83, while Spain's retail sales for September showed a 6.5% YoY growth. Both cautiously good signs for the European economy.

US equity futures rise after two consecutive days of sell-offs. Positive earnings from Amazon and Intel are pushing the tech heavy Nasdaq up 0.85%. Amazon's Q3 revenue soared 13% YoY to $143.1 billion, surpassing forecasts, while AWS revenue met expectations at $23.1 billion. Most investors were scared off after recent poor Big Tech earnings - however, are community is LONG in Amazon guided by our head analyst Robert Lindner and will enjoy a strong profit at NYSE opening. Amazon trades currently 5.6% higher in pre-market trading. Intel on the other hand, saw an increase in revenue driven by a PC rebound and segments like Client Computing and Datacenter, exceeded expectations with $14.2B in revenue and a 41-cent adjusted EPS, pushing shares up 6% after-hours. The Q4 outlook projects revenues up to $15.6B and a 44-cent adjusted EPS, outpacing analyst forecasts.

Investors await the release of the awaited PCE index, as well as reports from major oil corporations like ExxonMobil and Chevron. There is also much anticipation for the Federal Reserve's report on underlying price pressures. As well as a strong focus on the upcoming FOMC meeting to set the tone for the year.

We saw some positive movement in Asia, with Hong Kong leading the gains, up 2.32%. Japan is up 1.27%. Tokyo CPI for October came in at 3.3% YoY. JPY remain steady (=weak) after Tokyo inflation data. The CNY comes under pressure due to fresh borrowing and stimulus measures.

WTI crude prices rise by over 1.5% nearing $85/barrel following the US airstrikes in the Middle East (Syria). Demand rises for Gold as a safe-haven asset. Outlook indicates dwindling rate hikes, but gold still faces headwinds from high yields. Gold is currently trading at $1986/oz. 

Key events today:

USD Consumer Confidence - 06:45 UTC+0 (released)

EUR GDP Growth Rate, Retail Sales - 07:00 UTC+0 (released) 

USD Consumer Confidence - 08:00 UTC+0 (released)

USD PCE Price Index, Personal Incoming and Spending - 12:30 UTC+0

USD Michigan Consumer Sentiment - 14:00 UTC+0

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