Tuesday October 13th

13-10-2020

S&P 500 futures are flat with earnings season kicking off, Nasdaq futures jump 1% as Apple gains

U.S. stock index futures were mixed on Tuesday as investors digested the first batch of corporate earnings and looked for updates on a stimulus package. S&P 500 futures were little changed and Dow Jones Industrial Average futures fell 105 points, or 0.4%. However, Nasdaq 100 futures jumped 1% as Apple shares continued their big gains. JPMorgan Chase reported better-than-expected results for the third quarter, sending the stock up more than 1% in the premarket. Johnson & Johnson, another Dow component, posted earnings that beat analyst expectations and raised its full-year profit guidance. However, J&J shares were down 1.6% after the company paused its coronavirus vaccine trial after an “adverse event” was reported 36 hours ago. Asset-management giant BlackRock saw its shares gain nearly 4% after the company reported earnings that beat analyst expectations. BlackRock also said its assets under management grew to $7.81 trillion from $7.32 trillion in the previous quarter. Shares of Citigroup also rose after beating estimates for revenue and earnings. Delta Air Lines, however, reported a wider-than-expected loss for the quarter and revenues down 75% compared with the same quarter last year. Shares fell 2.9%.Third-quarter results overall are expected to decline significantly; however, traders are hoping for surprise to the upside. Apple’s long awaited iPhone launch, which was pushed to October due to Covid-19, occurs on Tuesday and the company is expected to launch its first ever 5G iPhone.  It will be “the most significant iPhone event in years,” Morgan Stanley’s Katy Huberty told clients. Apple shares were up another 2% in premarket trading Tuesday. Amazon’s Prime Day starts on Tuesday and the two-day event could mark the biggest online shopping day of the year, according to NPD, with 57% of consumers planning to do some if not all of their holiday shopping this week. Amazon shares gained 1.5% in premarket trading Tuesday following a 4.8% pop on Monday. Disney rallied more than 4% in premarket trading after announcing a major company reorganization with streaming at the forefront of its business. Disney said it centralizing its media businesses into a single organization that will be responsible for content distribution, ad sales and Disney+. Investors also weighed the possibility of a second coronavirus relief package from Washington. Over the weekend, the Trump administration called on Congress to pass a smaller $1.8 billion coronavirus relief bill as negotiations on a bigger package continue to run into roadblocks. However, House Speaker Nancy Pelosi In a letter to colleagues, said the proposition has insufficient offers on healthcare issues. “This hardly seems about ‘stimulus’ anymore,” Jim Paulsen, chief investment strategist at the Leuthold Group, told CNBC. The S&P 500 index rallied back near all-time record highs today led by growth -- the technology, communications, and consumer discretionary sectors.” “Recently, the stock market has been rising whether news surrounding an additional stimulus package is good or bad, suggesting stocks are already responding to what will likely prove to be a wonderful quarterly earnings season,” Paulsen added. The Labor Department also released its consumer price index for September. The measure met expectations with an increase of 0.2%, though prices for used cars rising sharply. Trading in Hong Kong was suspended on Tuesday due to Typhoon Nangka, while other Asia-Pacific markets were mostly higher. Mainland Chinese stocks were higher on the day, as the Shanghai composite rose slightly to about 3,359.75 while the Shenzhen component added 0.66% to around 13,798.58. In Japan, the Nikkei 225 rose 0.18% to close at 23,601.78 while the Topix index finished its trading day 0.35% higher at 1,649.10. South Korea’s Kospi was below the flatline, closing at 2,403.15. Oil prices were steady on Tuesday, sitting on losses of nearly 3% from the previous session as supplies began to resume in Norway, the U.S. Gulf of Mexico and Libya, while the IEA forecast a 5% fall in global energy demand in 2020. U.S. West Texas Intermediate crude futures inched up 4 cents to $39.47 a barrel at 0448 GMT, while Brent crude futures also rose 4 cents to $41.76 a barrel. Gold prices fell on Tuesday with a slight rebound in dollar, while investors clung to hopes of a U.S. stimulus package being eventually released. Spot gold dipped 0.6% to $1,910.76 per ounce by 0346 GMT. U.S. gold futures were down 0.3% to $1,923.