Alphabet beats and Treasuries rally
A look at the day ahead in U.S. and global markets from Mike Dolan
Markets struggling which way to look will be dizzy again in an event-strewn Wednesday but the spotlight first thing drops on Alphabet's GOOGL.O impressive earnings beat and a relief-rally in election-bruised U.S. Treasuries.
A critical fortnight for investors includes next week's U.S. election and Federal Reserve meeting, GDP updates later on Wednesday, the October employment report on Friday, a Bank of Japan policy meeting and pivotal first budget from Britain's new government.
With a torrent of top corporate earnings reports streaming in to boot, the overnight focus was on Google-parent Alphabet's update - the second of the so-called Magnificent Seven of U.S. megacaps to report so far. Microsoft and Meta are due out later.
Alphabet stock was up about 2% ahead of the bell after the beat with the firm saying its artificial intelligence spend was "paying off" alongside a 35% surge in its cloud business and an election-related jump in YouTube ad sales.
Even though all the megacaps were higher overnight in sympathy, Alphabet's stock rise was tempered from an initial 5% gain - due in part to more mixed earnings news elsewhere. Advanced Micro Devices AMD.O, for example, skidded 7% after it forecast revenue just shy of estimates, even as it upped its AI chip sales forecast to $5 billion for 2025.
AI-watchers also homed in on news that OpenAI is working with Broadcom AVGO.O and TSMC 2330.TW to build its first in-house chip designed to support its AI systems.
With the tech-heavy Nasdaq .IXIC outperforming on Tuesday to clock its first record close since July, U.S. stock index futures more broadly were slightly higher ahead of Wednesday's open.
Helping the mood was a retreat in restive U.S. Treasury yields US10YT=RR, as news of a softening of U.S. job openings last month was twinned with strong demand for a $44 billion sale of 7-year notes. Those sold at a high yield of 4.215%, almost 2 basis points below where they traded before the auction, and the take-up was above average at 2.74 times the debt on offer.
Even though U.S. consumer confidence readings for October were better than forecast, the 10-year benchmark yield has recoiled more than 10 bp from Tuesday's peak to hover about 4.22% first thing.
U.S. GDP updates and private sector jobs numbers top the slate on Wednesday - with brisk 3.0% growth expected to be confirmed for the third quarter alongside headline inflation readings near the Federal Reserve's target.
EUROPEAN ECONOMY
Overseas, there was better news than expected in Europe - with Germany defying forecasts of a contraction in Q3 and advancing 0.2% instead, while Spain's equivalent readout also surprised to the upside and jumped an annual 3.4%.
France did better too, but Italy stalled over the quarter.
And yet dark clouds over the European economy were hard to shift as the European Union on Tuesday decided to increase tariffs on Chinese-built electric vehicles to as much as 45.3% at the end of its highest profile investigation that has divided Europe and prompted retaliation from Beijing.
The prospect of an EU/China trade war was compounded by U.S. election risks as Republican candidate Donald Trump insisted the EU would have to "pay a big price" for not buying enough American exports if he won the Nov. 5 election.
Also facing a barrage of earnings updates in the region, European stocks .STOXXE fell almost 1% - with Volkswagen VOWG_p.DE underscoring auto sector anxieties by reporting a 42% drop in third-quarter profit that is prompting plant closures and threats of a workers strike.
And yet the combination of softer U.S. yields and the German GDP beat saw the euro EUR= regain some ground against the dollar, whose broader index .DXY slipped back.
Post-election U.S. tariff fears dragged on Chinese stocks .CSI300, .HSI too, with both mainland and Hong Kong indexes down 1% or more.
A top Chinese leadership meeting next week could reveal stimulus details and Reuters has reported it is considering the sale of over 10 trillion yuan ($1.4 trillion) in extra debt in the next few years to revive its economy - possibly more depending on the outcome of the U.S. election where Trump has pledged 60% tariffs on all Chinese imports.
The offshore yuan CNH= bounced back from Tuesday's 2-month low against the softer dollar.
Elsewhere, sterling GBP= was steady to firmer and UK gilt yields GB10YT=RR calmer ahead of the other big event of the day - budget plans from British finance minister Rachel Reeves.
Reeves' tax rises and investment spending plans are expected to push UK government bond issuance towards 300 billion pounds ($389 billion) this fiscal year, a roughly 6% increase on the existing target, according to a Reuters poll of bond dealers.
Ahead of the widely telegraphed set piece, Reeves said on Tuesday Britain's minimum wage for most adults would increase by 6.7% from April next year, above prior independent estimates of a 3.9% rise.
Britain's blue-chip FTSE stock index .FTSE was slightly in the red ahead of the budget, hampered by a 3.5% drop in pharma giant GSK GSK.L after it warned that its vaccine sales would fall this year.
Other big earnings reports included a UBS beat UBSG.S that sent the stock of the Swiss banking behemoth up 1%.
Key developments that should provide more direction to U.S. markets later on Wednesday:
* US Q3 GDP and related inflation measures, October ADP private sector payrolls, September pending home sales
* US corporate earnings: Microsoft, Meta Platforms, Eli Lilly, Amgen, AbbVie, BioGen, Metlife, Prudential Financial, Caterpillar, Kraft Heinz, Paycom Software, Global Payments, Automatic Data Processing, Gen Digital, Cognizant Technology, Verisk, Clorox, Ventas, GE Healthcare, Equinix, Allstate, Hess, Garmin, Booking, MGM Resorts, Otis, Illinois Tool Works etc
* British finance minister Rachel Reeves presents first budget of new Labour Party government
* European Central Bank board member Isabel Schnabel speaks; Bank of Canada Governor Tiff Macklem speaks
More jobs than jobseekers in the US https://reut.rs/4evNBOA
US consumer confidence rises https://reut.rs/4e89fay
Harris and Trump tied: latest Reuters/Ipsos US presidential poll tracker https://reut.rs/4814CgV
US betting markets and Trump Media https://reut.rs/4e0n5M0
Alphabet's cloud revenue growth accelerates on AI boom https://reut.rs/4hpeEwE
Writing by Mike Dolan,
mike.dolan@thomsonreuters.com;
Editing by Alison Williams
متعلقہ اثاثے
تازہ ترين خبريں
دستبرداری: XM Group کے ادارے ہماری آن لائن تجارت کی سہولت تک صرف عملدرآمد کی خدمت اور رسائی مہیا کرتے ہیں، کسی شخص کو ویب سائٹ پر یا اس کے ذریعے دستیاب کانٹینٹ کو دیکھنے اور/یا استعمال کرنے کی اجازت دیتا ہے، اس پر تبدیل یا توسیع کا ارادہ نہیں ہے ، اور نہ ہی یہ تبدیل ہوتا ہے یا اس پر وسعت کریں۔ اس طرح کی رسائی اور استعمال ہمیشہ مشروط ہوتا ہے: (i) شرائط و ضوابط؛ (ii) خطرہ انتباہات؛ اور (iii) مکمل دستبرداری۔ لہذا اس طرح کے مواد کو عام معلومات سے زیادہ کے طور پر فراہم کیا جاتا ہے۔ خاص طور پر، براہ کرم آگاہ رہیں کہ ہماری آن لائن تجارت کی سہولت کے مندرجات نہ تو کوئی درخواست ہے، اور نہ ہی فنانشل مارکیٹ میں کوئی لین دین داخل کرنے کی پیش کش ہے۔ کسی بھی فنانشل مارکیٹ میں تجارت میں آپ کے سرمائے کے لئے ایک خاص سطح کا خطرہ ہوتا ہے۔
ہماری آن لائن تجارتی سہولت پر شائع ہونے والے تمام مٹیریل کا مقصد صرف تعلیمی/معلوماتی مقاصد کے لئے ہے، اور اس میں شامل نہیں ہے — اور نہ ہی اسے فنانشل، سرمایہ کاری ٹیکس یا تجارتی مشورے اور سفارشات؛ یا ہماری تجارتی قیمتوں کا ریکارڈ؛ یا کسی بھی فنانشل انسٹرومنٹ میں لین دین کی پیشکش؛ یا اسکے لئے مانگ؛ یا غیر متنازعہ مالی تشہیرات پر مشتمل سمجھا جانا چاہئے۔
کوئی تھرڈ پارٹی کانٹینٹ، نیز XM کے ذریعہ تیار کردہ کانٹینٹ، جیسے: راۓ، خبریں، تحقیق، تجزیہ، قیمتیں اور دیگر معلومات یا اس ویب سائٹ پر مشتمل تھرڈ پارٹی کے سائٹس کے لنکس کو "جیسے ہے" کی بنیاد پر فراہم کیا جاتا ہے، عام مارکیٹ کی تفسیر کے طور پر، اور سرمایہ کاری کے مشورے کو تشکیل نہ دیں۔ اس حد تک کہ کسی بھی کانٹینٹ کو سرمایہ کاری کی تحقیقات کے طور پر سمجھا جاتا ہے، آپ کو نوٹ کرنا اور قبول کرنا ہوگا کہ یہ کانٹینٹ سرمایہ کاری کی تحقیق کی آزادی کو فروغ دینے کے لئے ڈیزائن کردہ قانونی تقاضوں کے مطابق نہیں ہے اور تیار نہیں کیا گیا ہے، اسی طرح، اس پر غور کیا جائے گا بطور متعلقہ قوانین اور ضوابط کے تحت مارکیٹنگ مواصلات۔ براہ کرم یقینی بنائیں کہ آپ غیر آزاد سرمایہ کاری سے متعلق ہماری اطلاع کو پڑھ اور سمجھ چکے ہیں۔ مذکورہ بالا معلومات کے بارے میں تحقیق اور رسک وارننگ ، جس تک رسائی یہاں حاصل کی جا سکتی ہے۔
