Good morning, today is Monday, October 16th. On Friday, major US stock indices closed in negative territory, except for the Dow Jones, which managed to stay in the green, gaining 1012 points. The Nasdaq, on the other hand, saw a loss of 125 points. Despite this, all indices managed to end the week positively, with the Nasdaq remaining relatively flat while the Dow Jones closed with a gain of about 80 points.
The Dow Jones performed well on Friday, primarily due to the release of quarterly earnings reports from major American banks, including City, Wells Fargo, and particularly JP Morgan. JP Morgan exceeded expectations with a 35% profit growth and a 22% increase in revenue, demonstrating the benefit of high-interest rates for banks.
Looking ahead, we anticipate results from Goldman Sachs and Bank of America with optimism. Regarding Friday’s performance, the appreciation of oil prices, with crude reaching around $87 per barrel and Brent even surpassing $90, had a significant impact, contributing to a negative trading day despite strong bank results.
Currently, oil prices are relatively stable, having increased significantly on Friday. Treasury markets remained more or less stable, with the 10-year bond yield surpassing 5% while the 2-year bond yield remained stable. Tensions in the Middle East persist, with a ceasefire signed between Egypt and Israel in southern Gaza, although Israeli sources have yet to confirm it. The situation remains tense, with the risk of escalation involving Lebanon and Iran.
Asian markets also felt the impact, with negative performance overnight, particularly in Hong Kong and Shanghai. The Chinese central bank injected a substantial amount of money into the market, marking the largest money issuance since December 2020.
This week, there are no significant economic calendar events, but we await the release of upcoming earnings reports, particularly from the banks, Bank of America, and Goldman Sachs. We will monitor how the week unfolds, as indices are currently relatively stable. The market’s focus remains on bank profits and the situation in the Middle East.
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