Good morning, Tuesday, October 17th started well for the American stock markets. The three main indices recorded a significant rally. The Nasdaq gained 1.8%, the S&P 0.6%, and the Dow Jones 0.93%. This rally was primarily due to excellent corporate performance on Monday, continuing the positive trend from the previous week. Even though there were no major companies releasing results, all exceeded analyst expectations. In particular, HDFC Bank, an American bank, surpassed forecasts with an EPS of $0.75 compared to the expected $0.45, and Charles Swap, the broker, also exceeded analyst expectations.
These exceptional corporate results contributed to a positive close for the stock markets. The euro also saw a slight recovery, trading at 1.1550 against the dollar, although it remained unchanged today, gaining just 0.12% against the dollar. However, it’s worth noting that Treasury bond yields rose to 4.70%, or even 4.76%, while the yield on the ten-year bonds climbed to 5.11%.
Despite the critical situation in the Middle East, the excellent corporate performance temporarily eased investor concerns. However, these tensions will remain an influential factor in the markets in the coming days and weeks.
This week is expected to be very intense in terms of corporate earnings releases. Today, data from Johnson & Johnson, Bank of America, and Goldman Sachs will be disclosed, and expectations are positive, in line with the results of the banks presented yesterday. Additionally, this week will also see the results of Tesla, Netflix, and many others, with particular attention to the results of major companies.
In addition to corporate performance, news from the Middle East will continue to be an important factor to monitor. Despite growing optimism for the last quarter of the year, with some predictions indicating that the S&P could reach 4,600, there is also the opinion of Morgan Stanley, forecasting sales towards the end of the year and a potential decline of the index to 3,900. Much will depend on the corporate earnings season in the coming weeks and the news from the Middle East. We remain awaiting further developments.
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