Benzinga - by Shanthi Rexaline, Benzinga Editor.
Buoyed by earnings optimism, stocks appear on track for a positive open on Tuesday after the tech-heavy Nasdaq Composite Index snapped a four-day losing streak in the previous session. The uptick in bond yields could reignite anxiety among traders. although earnings will likely be front and center in Tuesday’s session. Mega-caps Alphabet, Inc. (NASDAQ:GOOGL) (NASDAQ:GOOG) and Microsoft Corp. (NASDAQ:MSFT) are set to announce their earnings after the market close. Traders will likely closely watch the reports and management commentary to make sense of what could be in store for the rest of the tech pack.
The preliminary private sector activity readings for October scheduled after the market close and the direction of oil prices could also have a bearing on the market movement.
Cues From Monday's Trading:
The major averages meandered to a mixed close on Monday, as apprehensions over rising bond yields, earnings, and the geopolitical situation gave way to optimism amid a pullback in yields. The major averages opened lower but cut their losses in early trading and moved into positive territory. Some of the upsides were aided by bargain hunting following multi-session declines.
The Nasdaq Composite and the S&P 500 Index remained firmly in the green before diverging in late trading. While the former closed higher for the session, the latter ended modestly lower, extending its losing streak to the fifth straight session. The Dow Industrials stayed mostly in the red before ending moderately lower.
Energy, material, financial, real estate, utility, and IT services stocks lost ground in the session, while gains by communication services and IT stocks helped mitigate some of the weakness.
US Index Performance On Tuesday
| Index | Performance (+/-) |
Value |
| Nasdaq Composite | +0.27% | 13,018.33 |
| S&P 500 Index | -0.17% | 4,217.04 |
| Dow Industrials | -0.58% | 32,936.41 |
| Russell 2000 | -0.89% | 1,665.88 |
Analyst Color:
As four of the “Magnificent Seven” get ready to release their quarterly results, analysts are hopeful of getting positive earnings reports. Fund manager Louis Navellier said, “None are expected to see the volatility we’ve seen in Tesla, whose cars are vulnerable to higher loan rates and is in the far-from-mature Electric Vehicle market.”
Wharton professor Jeremy Siegel also expressed a similar opinion in his weekly WisdomTree commentary. “But in general, the stronger economy is supporting earnings growth in the fourth quarter and in 2024, which makes me bullish for 2024,” he said.
Navellier, meanwhile, sounded a note of caution. “But it will be important that the rest of the Magnificent Seven don’t deliver any negative surprises.” He noted that their P/E multiples are higher than average and have been the primary benefactors of the enthusiasm for AI potential.
Futures Today
Futures Performance On Tuesday
| Futures | Performance (+/-) |
| Nasdaq 100 | +0.64% |
| S&P 500 | +0.51% |
| Dow | +0.39% |
| R2K | +0.74% |
In premarket trading on Tuesday, the SPDR S&P 500 ETF Trust (NYSE:SPY) rose 0.55% to $422.76 and the Invesco QQQ ETF (NASDAQ:QQQ) jumped 0.67% to $358.05, according to Benzinga Pro data.
Upcoming Economic Data:
The S&P Global is scheduled to release the flash manufacturing, services and composite purchasing managers’ indices for October at 9:45 a.m. EDT. The manufacturing PMI is expected to edge down from 49.8 in September to 49.5 in October and the services sector PMI may have fallen from 50.1 to 49.8, suggesting the sector has fallen into contraction territory.
The Richmond Federal Reserve is due to release its regional manufacturing and services PMI at 10 a.m. EDT.
The Treasury will auction two-year notes at 1 p.m. EDT.
See also: Futures Vs. Options
Stocks In Focus:
- Coinbase Global, Inc. (NASDAQ:COIN) surged up over 7% in premarket trading after an appeals court ordered the SEC to review the Grayscale Bitcoin (CRYPTO: BTC) Spot ETF application. Other crypto-linked stocks such as Riot Platforms, Inc. (NASDAQ:RIOT) and Marathon Digital Holdings, Inc. (NASDAQ:MARA) were all higher by over 13%.
- Mega caps such as Tesla, Inc. (NASDAQ:TSLA) and Nvidia Corp. (NASDAQ:NVDA) climbed amid an increase in risk appetite.
- 3M Company (NYSE:MMM), Archer-Daniels-Midland Company (NYSE:ADM), The Coca-Cola Company (NYSE:KO), Dow Inc. (NYSE:DOW), General Electric Company (NYSE:GE), General Motors Company (NYSE:GM), Halliburton Company (NYSE:HAL), PulteGroup, Inc. (NYSE:PHM), Novartis AG (NYSE:NVS), Spotify Technology S.A. (NYSE:SPOT), Verizon Communications Inc. (NYSE:VZ) and Xerox Holdings Corporation (NASDAQ:XRX) are among the notable companies reporting their quarterly results ahead of the market open.
- Those reporting after the close include Alphabet, Boyd Gaming Corporation (NYSE:BYD), Microsoft, Snap, Inc. (NYSE:SNAP), Texas Instruments Incorporated (NASDAQ:TXN) and Visa, Inc. (NYSE:V).
Crude oil futures rose 0.70% to $86.09 in early European session on Tuesday, reversing some of Monday’s 2.56% pullback.
The yield on the benchmark 10-year Treasury note has resumed its climb, rising 0.019 percentage points to 4.857% on Tuesday.
Most Asian markets rebounded on Tuesday, tracking the gains among technology stocks in the U.S. overnight. The Hong Kong, New Zealand, and Malaysian markets bucked the downtrend, while the Indian market was closed for a public holiday. European stocks traded with moderate-to-modest gains by late morning on Tuesday. The gains came despite weak manufacturing and service sector activity data from the region.
Related Link: 10-Year Yield At 5% Triggers Waves Of Treasury Buyers: Bill Ackman, Technical Indicators Hint At Potential Shift
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