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Better-than-expected earnings boost US stocks

　　

U.S. equities extended their gains into the second trading day of the week. The Dow Jones Industrial Average rose 1.12% to close at 30523.8. The S&P 500 gained 1.14% to close at 3719.98. The tech-heavy Nasdaq Composite edged 0.9% higher to close at 10772.4. Equities continued to be buoyed by better-than-expected earnings releases. Netflix reported earnings after the bell last night. The company reported an earnings beat of $3.1 EPS, beating market consensus by 43%. United Airlines also reported better-than-expected earnings of $2.28 EPS, beating market consensus by 23.1%.

The benchmark U.S. 10-year treasury yield continues to trade above 4% and was last seen at 4.009%.

Of the 9.15% of S&P 500 companies that have reported earnings so far this season, 70% of them have posted positive surprises, according to data from FactSet. Earnings expectations have been lowered considerably and the market is braced for a good amount of negative news in earnings season, thus an average performance from corporate America may well be the breakaway from recent bear market price movements market participants are waiting for.

Main Pairs Movement

The Dollar index lost 0.06% throughout yesterday’s trading. The Dollar has continued to lose steam for the second straight day as risk sentiment continues to improve due to better corporate earnings results and the recent UK policy reversal.

EURUSD gained 0.17% throughout yesterday’s trading. The broad-based weakness of the Dollar has put EURUSD on a solid upward trajectory; furthermore, the upside surprise of economic sentiment in Germany has provided a boost of confidence for the Euro.

GBPUSD retreated 0.28% throughout yesterday’s trading. The British Pound fared worse against a weakening Dollar. The newly appointed minister of finance, Jeremy Hunt, is scheduled to deliver tax and spending measures on next Monday.

Gold edged 0.08% higher throughout yesterday’s trading. The non-yielding metal continues to find appreciating headroom as the Dollar weakens.

Economic Data

CurrencyDataTime (GMT + 8)Forecast
GBPCPI (YoY) (Sep)14:0010.0%
EURCPI (YoY) (Sep)17:0010.0%
USDBuilding Permits (Sep)20:301.530M
CADCore CPI (MoM) (Sep)20:30 
USDCrude Oil Inventories22:301.380M
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