Markets Rebound as Corporate Earnings Stream In

The stock market broke its 2023 slide, buoyed by positive corporate earnings. Eyes are now on tech giants Microsoft Corp. (MSFT) and Google’s parent, Alphabet Inc. (GOOG), for their post-close results. The S&P 500 ended its five-day slump, with Verizon Communications Inc. (VZ), 3M Co. (MMM), Coca-Cola Co. (KO), and General Electric Co. (GE) seeing uplifts due to optimistic forecasts. Cryptocurrency-linked shares also gained momentum as Bitcoin hovered around $35,000.

While the market sentiment is lifted, all eyes are on the big tech earnings. The giants of the S&P 500, namely Apple Inc. (AAPL), Microsoft, Alphabet, Amazon.com Inc. (AMZN), and Nvidia Corp. (NVDA), contribute significantly to the benchmark’s market value. Bloomberg Intelligence projects a 34% average earnings spike for these entities compared to last year. Despite this, rising rates have made the valuations of big tech firms appear costly.

Investors are particularly keen on Alphabet and Microsoft’s performance, hoping their earnings growth might spur the stocks upwards or at least validate the gains so far this year. On the economic front, October saw a resurgence in U.S. business activity, propelled by increased factory demand and moderated inflation in the service sector.

Globally, China’s President Xi Jinping is amplifying support for the economy through various measures, while European Central Bank’s Christine Lagarde believes the battle against inflation is on track. However, uncertainties regarding fiscal rules remain.

Corporate Quick Takes:

• Kimberly-Clark Corp. (KMB) optimistically revised its annual earnings projections.
• RTX Corp. (RTX) has set in motion a $10 billion share-buyback scheme.
• General Motors Co. (GM) remains uncertain about achieving its $14 billion profit target this year due to ongoing strikes.
• Barclays Plc (BCS) plans to slash expenses post a trading dip in Q3.

Market Movements Snapshot:

• Stocks: S&P 500, Nasdaq 100, and the Dow Jones all trended upwards.
• Currencies: The Bloomberg Dollar Spot Index rose, but the euro, British pound, and Japanese yen all saw declines.
• Cryptos: Bitcoin and Ether both trended upwards.
• Bonds:S. 10-year Treasuries’ yield saw a slight increase.
• Commodities: West Texas Intermediate crude dipped, while gold also saw a decline.