The stock market moved higher on Monday as investors awaited a series of earnings results from large technology companies and many other industry companies this week.
The Dow Jones and Standard & Poor's 500 indexes hit new intraday and closing highs. The Nasdaq Index rose, Tesla's (TSLA) stock price hit a record high, and its market value exceeded US$1 trillion for the first time.
US West Texas Intermediate Crude Oil (CL=F) Crude oil prices exceeded US$85 per barrel, reaching the highest level since 2014. This move followed the rise of the international benchmark Brent crude oil (BZ=F). The price of the crude oil rose to more than US$86 per barrel, a record high. The Minister of Energy of Saudi Arabia stated in an interview with Bloomberg that despite the rapid price increase, oil producers It remains cautious in increasing production, and the level has remained at the level since 2018.
The benchmark 10-year U.S. Treasury bond yield is hovering at around 1.64%, or close to its highest level since May, because inflation concerns remain investors’ concerns amid rising energy and commodity prices and other price increases in the economic recovery Focus. Last week, Federal Reserve Chairman Jerome Powell said that inflationary pressures caused by supply chain restrictions “may last longer than previously expected, and it is likely to continue until next year.”
Many individual companies have also pointed out the impact of rising costs in their earnings reports over the past few weeks. Kevin Boone, executive vice president of sales and marketing at freight rail company CSX Transportation (CSX), said on the company's earnings call last week that cost inflation has exceeded last year, "expectations have risen and will rise next year. Similarly, Whirlpool (WHRL) CEO Marc Bitzer stated on the home appliance company’s earnings call that he does not “foresee a rapid decline in inflation next year”.
This week's earnings results will focus on the performance of large technology companies, including Facebook (FB), Apple (AAPL), Amazon (AMZN) and Alphabet (GOOGL). These include some of the most weighted components in the S&P 500 index. After the surge in demand for in-situ orders and technology for keeping in touch in 2020, most of the components have underperformed the market this year.
Despite continuing challenges on the supply side, investors still want to see these companies echo the performance of other early reporters and release performance that exceeds expectations. For technology companies, these concerns may focus on the impact of global chip shortages and the impact of rising labor costs because they have a large amount of labor.
"Despite the lingering shortage of black cloud chips, we still firmly believe that the third quarter of this week technology earnings will perform outstandingly, which will help promote the industry to rise by the end of the year, because Wall Street continues to underestimate the fundamentals of this multi-trillion-dollar digital transformation. Face. Consumer and corporate technology names,” Wedbush analyst Dan Ives wrote in a report on Sunday.
Nevertheless, according to data from Deutsche Bank, this week will generally be a busy earnings season, with about 165 companies in the Standard & Poor's 500 index reporting their results.
According to data from FactSet, as of Friday, about 23% of the S&P 500 index constituent companies announced actual results for the third quarter, of which 84% exceeded Wall Street’s earnings per share (EPS) expectations. The expected earnings growth rate for the Standard & Poor's 500 Index is 32.7%, which is based on the company's actual performance and expectations that have not been reported as of last week. If maintained until the end of the third quarter earnings season, this will mark the third highest earnings growth rate for the index since 2010.
The following are the main market trends as of 4:07 pm Eastern Time:
Standard & Poor's 500 (^ GSPC): 21.58 (0.47%) to 4,566.48
Crude oil (CL=F): -0.36 USD (-0.43%) to 83.40 USD per barrel
Gold (GC=F): USD 11.50 (0.64%) to USD 1,807.80 per ounce
10-year treasury bond (^TNX): -2 basis points, yielding 1.6350%
The following are the market transactions on Monday afternoon:
S&P 500 Index (^ GSPC): 21.24 (0.47%) to 4,566.14
Crude oil (CL=F): 0.33 USD (0.39%) to 84.09 USD per barrel
Gold (GC=F): USD 13.60 (0.76%) to USD 1,809.90 per ounce
10-year Treasury Bond (^TNX): -2.4 basis points, with a yield of 1.631%
Brian Moynihan, chief executive of Bank of America, expressed optimism about the state of American consumers, noting that spending in various ways is increasing, and personal savings remain strong. He said this in turn led to strong economic activity.
"A lot of people pay attention to credit and debit card payments, but this only accounts for 20% to 25% of all the ways consumers spend money," Moynihan said at the All Market Summit on Yahoo Finance on Monday. "If you really understand how consumers spend money—writing checks, withdrawing money from ATMs, Zelle payments, ACH payments, wire transfers, etc.—for us, as of October 2021, so far, approximately 2.8 trillion dollars in activities."
He added that this number has increased by about 20% compared to 2020 and has increased by more than 20% compared to the same period in 2019.
"This is a very strong growth rate, the strongest growth rate we have seen in the past many years...so consumers are spending money," Moynihan added. "All in all, the simple fact is that the size of the economy is nominally 2019. It is growing and is expected to grow at two to three times the growth rate predicted at the time. Consumer spending is actually twice the growth rate.
"The question is, is it all because of stimulus and funding? If you look at our consumer checking accounts, the average deposit of people in the past six months was $10,000, or even $15,000 or less. Their deposit balances were in the past There are six months of growth every month," he said. "Then even in the last month of August and September, [it] increased by a few percentage points, which means that even after the stimulus measures are basically stopped, you will still see their accounts grow, which means they The accumulated cash exceeds their expenditure."
"This is a very strong pillar of a consumer-driven economy," he added. "As long as the COVID virus can be controlled, this is a pretty good picture."
Gary Gensler, chairman of the US Securities and Exchange Commission, reiterated his cautious attitude towards cryptocurrencies, implying that trading activities in this area need to be more strictly regulated.
"What the investing public cares about is the encrypted asset space [is] 2.5 trillion US dollars. Most of this is not in the scope of investor protection. Therefore, regardless of whether investors enter the stock or bond market that we have supervised for a long time, they will not Be protected," Gensler said at the All Market Summit on Yahoo Finance on Monday. "Without it, I think it really is, as I said to others, a little wild west. These markets are mainly on a global scale, 7 days a week, 24 hours a day, and there is no similar protection. Prevent fraud and preemptive manipulation and other abuses."
After the New York Stock Exchange launched the first US-listed Bitcoin futures ETF or ProShares last week, Gensler declined to comment on whether the SEC has become more willing to accept the idea of a fund that tracks the spot price of Bitcoin Bitcoin Strategy ETF (BITO). The fund-which allows investors to bet on futures contracts or expected price changes in Bitcoin-does not directly provide investment in Bitcoin (BTC-USD).
Gensler also suggested that the SEC can strengthen its control over cryptocurrency companies that issue stablecoins. The Wall Street Journal reported earlier this month that the Biden administration is paying attention to this move, which may include a special purpose charter for stablecoin issuers.
"Today there are approximately $130 billion worth of stablecoins. Last year it has grown nearly 10 times, and they are intertwined in cryptocurrency exchanges, cryptocurrency lending platforms, and so-called DeFi," Gensler said. "It can be said that those'poker chips' are promoting 80% of the transaction volume. Therefore, they only account for 5% of the cryptocurrency market, but account for 80% of the transaction volume of such token-to-token and crypto-to-crypto transactions. So I think there is a lot of speculation. Again, it’s better to include it in the scope of regulatory investor protection."
This is where the market trades on Monday morning:
Standard & Poor's 500 (^ GSPC): 9.75 (0.21%) to 4,554.65
Crude oil (CL=F): US$1.36 (1.62%) to US$85.12 per barrel
Gold (GC=F): US$8.50 (0.47%) to US$1,804.80 per ounce
10-year treasury bond (^TNX): -1.5 basis points, yield 1.64%
After PayPal (PYPL) stated in a short statement that it would not consider acquiring the company, Pinterest (PINS)'s stock price fell in early trading. Pinterest's stock price fell about 15% before the opening.
PayPal said on Sunday: "In response to market rumors about PayPal's possible acquisition of Pinterest, PayPal said it does not intend to acquire Pinterest at this time."
Bloomberg reported last week that the fintech company is considering a transaction with Pinterest, which may be valued at $45 billion. The report caused Pinterest's stock price to soar, and PayPal's stock price fell. The former's stock price rose by 12.8% on October 20, the report's release date, while the latter's stock price fell by 5%.
Tesla's (TSLA) share price is expected to hit a record high, breaking the record high since last Friday, as investors are delighted by the new deal with the car rental company Hertz and the optimistic outlook of a major Wall Street company. During the pre-market trading hours, the stock trading price was higher than $946 per share.
Hertz announced on Monday that the company has ordered 100,000 Tesla vehicles, which will be delivered by the end of 2022. Hertz said it is "providing the largest electric car rental fleet in North America and one of the largest electric car rental fleets in the world," and it has also ordered new electric car charging infrastructure for global use.
In addition, Morgan Stanley analyst Adam Jonas raised the target price of Tesla stock to $1,200 from the $900 he had seen before, making his target one of the highest on Wall Street. Prior to this, despite chip shortages and port congestion, Tesla’s third-quarter profit exceeded Wall Street’s expectations, but the company’s quarterly deliveries hit a record high.
This is where the market trades before the opening:
Standard & Poor's 500 futures (ES=F): 4.25 points (0.09%) to 4,540.75
Dow Futures (YM=F): 3 points (0.01%) to 35,560.00
Nasdaq futures (NQ=F): 34.75 points (0.23%) to 15,375.75
Crude oil (CL=F): US$0.95 (1.13%) to US$84.71 per barrel
Gold (GC=F): US$5.90 (0.33%) to US$1,802.20 per ounce
10-year treasury bond (^TNX): 0.4 basis point, yield 1.659%
Emily McCormick is a reporter for Yahoo Finance. Follow her on twitter
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