Tuesday October 18th

18-10-2016

Dow futures rise 100 points after inflation data, earnings deluge; Fed eyed

U.S. stock index futures pointed to a higher open on Tuesday, as investors digested another batch of corporate earnings, while keeping an eye out for news on oil, the Federal Reserve and new data. Dow futures rose more than 100 points, while S&P and Nasdaq futures gained 15 points and 39 points, respectively. Earnings are set to be front and center, as big U.S. brands are set to report. Out of the group, investors will be watching closely for financial news out of Intel, and Yahoo. BlackRock reported mixed results, missing estimates on revenue but beating on profits. Meanwhile, Dow component Johnson & Johnson posted better-than-expected earnings and sales. The firm also raised its full-year guidance. Goldman Sachs, another Dow component, also beat Wall Street expectations, continuing banks' strong earnings season. On Monday, Bank of America also reported better-than-expected corporate results. UnitedHealth Group, Harley-Davidson and Comerica were also among the firms that posted quarterly results. The U.S. central bank continues to be at the back on investors' minds this week, as talk about when the Fed will next raise interest rates remains a big topic and mover of markets. On Monday, Fed Vice Chairman Stanley Fischer warned of the dangers of low rates during a speech at the Economic Club of New York. During the remarks, he suggested that low rates could cause deeper and longer recessions, adding that the central bank had a limited ability to combat recessions. Investors will now be looking towards the Fed's Beige Book release, due out on Wednesday. Ahead of that, CPI data for September came in line with expectations, while the National Association of Home Builders (NAHB) survey is due out at 10 a.m. ET.When it comes to oil, prices rebounded on Tuesday, supported by weakness in the U.S. dollar and by some analysts saying that the markets may not be as oversupplied as others have suggested; Reuters reported. At around 8:30 a.m. ET, U.S. WTI stood around $50.20 per barrel, while Brent crude hovered around $51.75 a barrel. European stocks posted strong gains, while Asia-Pacific indexes mostly ended in positive territory overnight. In Japan, shares erased early losses to end higher, despite the relative strength in the yen. The benchmark Nikkei 225 edged up 63.49 points, or 0.38 percent, to close at 16,963.61, erasing earlier losses of 0.2 percent. The Topix index ended up 4.01 points, or 0.30 percent, at 1,356.57. Across the Korean Strait, the Kospi added 12.82 points, or 0.63 percent, to 2,040.43. Hong Kong's Hang Seng index added 1.48 percent in late-afternoon trade. Chinese mainland shares closed higher, with the Shanghai composite up 41.92 points, or 1.38 percent, at 3,083.08, while the Shenzhen composite gained 29.03 points, or 1.43 percent, to 2,056.59. In the previous session, U.S. markets closed lower. Gold prices rose on Tuesday as the dollar fell but receding worries about the outcome of the U.S. election and expectations of U.S. rate rises in December could mean lower levels. Spot gold was up 0.4 percent at $1,261.75 an ounce. U.S. gold futures gained 0.4 percent to $1,262.80 an ounce.