Europe Rises, US Futures Split as Big Banks Open Earnings Season
The FTSE 100 rose 0.9 percent to 10,751 in early trade on Tuesday while Nasdaq futures fell 0.6 percent. JPMorgan, Goldman Sachs, Citigroup and Wells Fargo report before the bell, and US inflation data lands on Wednesday.
Key points
- LONDON: European stocks opened higher on Tuesday, October 13, while Wall Street pointed in two directions at once.
- The FTSE 100 rose 95.25 points, or 0.9 percent, to 10,751.53 in early trade, Alliance News reported.
- US futures told a split story at 4:00 a.m. Eastern.
LONDON: European stocks opened higher on Tuesday, October 13, while Wall Street pointed in two directions at once. London led the gains. Tech pointed down. The split set the tone for a day that runs on bank earnings in New York and ends with an updated world growth forecast from the International Monetary Fund.
The FTSE 100 rose 95.25 points, or 0.9 percent, to 10,751.53 in early trade, Alliance News reported. The FTSE 250 rose 0.5 percent to 24,458.61. In Paris the CAC 40 rose about 0.3 to 0.5 percent. In Frankfurt the DAX rose 0.2 percent. The Eurostoxx index added 0.1 percent. London banks carried much of the rise, extending a strong Monday session in which the FTSE 100 closed up 1.0 percent at 10,656.28.
Futures split before the bell
US futures told a split story at 4:00 a.m. Eastern. Nasdaq futures fell 0.6 percent. S&P 500 futures were flat to down 0.1 percent. Dow futures rose 0.6 to 0.7 percent, and Russell 2000 futures gained 0.5 percent. Chip stocks led the premarket fall after the rout in Seoul. Micron fell 2.5 percent before the bell and Intel fell 2 percent, while Meta and Microsoft gained as money rotated into the largest tech names.
Oil eased and took some pressure off yields. Brent crude fell 1.2 percent to about 105.30 dollars a barrel. The 10-year Treasury yield fell five basis points to 5.194 percent after the market reopened from the Columbus Day break. The 30-year yield fell to 5.555 percent. Gold rose 0.5 percent to above 4,200 dollars an ounce. Bitcoin rose about 1 percent to near 83,900 dollars.
Banks open earnings season
The main event lands before the opening bell. JPMorgan Chase, Goldman Sachs, Citigroup and Wells Fargo all report third quarter results on Tuesday morning, with UnitedHealth and Johnson and Johnson also due. FactSet estimates that S&P 500 earnings grew nearly 30 percent from a year earlier, a high bar for the season. Traders want the banks to speak to three things: loan demand, trading revenue, and what their customers are doing. Bank of America and Morgan Stanley follow on Wednesday.
Analysts framed the morning as a test of rotation. The Dow rose on Monday while the Nasdaq fell, and money moved toward value stocks and away from long duration growth names. Higher oil, sticky inflation risk and the chance that rates stay high all favor that rotation, SPI Asset Management analyst Stephen Innes said in comments reported by Alliance News.
What happens next
Tuesday also brings US existing home sales data and speeches from Federal Reserve officials Christopher Waller, Tom Barkin and Susan Collins. The bigger test sits on Wednesday, when the September Consumer Price Index lands. A hot reading would push yields back up and squeeze the same tech stocks that are already falling. The IMF releases its updated world outlook on Tuesday as well, with managing director Kristalina Georgieva saying AI investment is holding global growth near 3 percent.