Top 5 Things to Know in the Market on Tuesday
Investing.com - Here are the top five things you need to know in financial markets on Tuesday, October 17:
1. Goldman Sachs, Morgan Stanley Earnings In focus
The third-quarter earnings season gets into full swing with major U.S. financial firms Goldman Sachs (NYSE: GS ) and Morgan Stanley (NYSE: MS ) due to post results ahead of the opening bell.
Johnson & Johnson (NYSE: JNJ ), UnitedHealth (NYSE: UNH ), Harley-Davidson (NYSE: HOG ), CSX (NASDAQ: CSX ) and Progressive (NYSE: PGR ) are also scheduled to report on Tuesday morning.
After the closing bell, IBM (NYSE: IBM ), United Continental (NYSE: UAL ), Cree (NASDAQ: CREE ), Interactive Brokers (NASDAQ: IBKR ) and Pinnacle Financial (NASDAQ: PNFP ) are set to post results.
Netflix (NASDAQ: NFLX ) earnings will also be in focus, after its stock jumped around 2% to reach an all-time high in after-hours trading Monday after the company posted a surprisingly large increase in subscribers.
2. Global Stock Markets Stay Near Highs
While the global stock rally showed signs of slowing, world shares stayed near their recent highs, supported by optimism about global growth prospects.
Asian-Pacific equities ended little changed, holding near their highest level since late 2007. Among notable standouts, Japan's Nikkei climbed for an 11th day to a level not seen since November 1996. On the downside, Chinese stocks ended lower ahead of the start of the Chinese Communist Party’s congress.
In Europe, shares were a shade higher in mid-morning trade, with Germany's DAX trading near last week's record highs, while Spain's IBEX 35 underperformed as the Catalonia crisis continued to steer Spanish stock performance.
On Wall Street, U.S. stocks pointing to a muted open as investors looked to key earnings reports to set the tone for the markets. On Monday, the three major benchmarks all scored record closing highs.
3. Race for Fed Chair Heats Up
The U.S. dollar and bond yields pushed higher, while gold prices sank, following a report that U.S. President Donald Trump was favoring Stanford economist John Taylor, seen as more hawkish than current Chair Janet Yellen, to head the Fed.
Trump is also due to meet with incumbent Janet Yellen later in the week as part of his search for a new candidate for her position, a source familiar with plans for the meeting said.
Market watchers are also keeping an eye on current Fed Governor Jerome Powell and former Fed official Kevin Warsh as potential candidates to succeed Yellen when her term ends in February.
The dollar index , which tracks the greenback's strength against a basket of six major currencies, rose to a one-week high of 93.37, while U.S. 2-year Treasury yields hit their highest in almost nine years.
4. Oil Prices Continue Higher as Iraq Violence Rages On
Oil prices continued higher for the third straight day following reports that Iraqi forces took control of oil fields in Kirkuk.
The fighting follows a referendum in which the Kurds, who run their own semiautonomous region in northern Iraq, voted overwhelmingly in favor of independence last month, defying Baghdad, regional powers and the U.S.
Brent crude futures, the benchmark for oil prices outside the U.S., added 0.6% to $58.15 a barrel. It rose 1.2% to its best level since Sept. 28 at $58.47 on Monday.
Meanwhile, U.S. West Texas Intermediate (WTI) crude futures gained 0.5% to $52.13 a barrel, after reaching a three-week high of $52.37 in the last session.
Investors looked ahead to weekly data on stockpiles of crude and refined products from the American Petroleum Institute at 4:30PM ET (2030GMT) to gauge the strength of demand in the world’s largest oil consumer.
5. UK inflation jumps to 5-1/2-year high
British inflation rose to its highest level in more than five years in September, according to official data that could make the Bank of England more likely to raise interest rates next month.
Consumer prices last month were 3.0% higher than a year ago, the Office for National Statistics said, matching expectations and marking the fastest rise since April 2012.
The data added to speculation that the BoE will raise interest rates for the first time in over a decade next month, with market players pricing in an around an 85% chance of a move at the bank's Nov. 2 meeting.
BoE Governor Mark Carney is scheduled to testify before the Treasury Select Committee in London at around 1015GMT (6:15AM ET), as market players seek further hints on his views on monetary policy.
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