Investors Shift Attention to Earnings This Week and Banks In Focus

Barry Adams
10 Oct, 2023
New York City

Market sentiment recovered and stocks scaled higher for the second day in a row this week after investors shifted focus to the start of earnings season. 

Stocks on Wall Street turned higher after Treasury yields edged lower and crude oil prices eased but investors took bets on bank stocks ahead of the release of earnings later in the week. 

While world financial markets focused on the fast evolving deadly conflict between Israel and Hamas, investors feared that neighboring oil producing countries may be drawn in the conflict. 

The worries of oil supply disruption receded on the fifth day of the conflict but natural gas prices soared for the second day in Europe after Israel asked Chevron to shut natural gas production for safety reasons.

Tech stocks led gainers on Wall Street and in broad rally benchmark indexes jumped more than 1% by midday.  

U.S. bond market was closed on Monday to observe Columbus Day and bond investors reacted for the first time today after the flare up of Israel-Hamas conflict in the Middle East. 

At the time of rising geopolitical tensions, investors sought safety in U.S. Treasury bonds, driving bond prices higher and lowering bond yields.

 

U.S. Indexes & Yields 

The S&P 500 index increased 0.7% to 4,366.39 and the Nasdaq Composite rose 0.7% to 13,586.58. 

The yield on 2-year Treasury notes decreased to 4.94%, 10-year Treasury notes inched lower to 4.64% and 30-year Treasury bonds edged down to 4.8%. 

Crude oil decreased $0.28 to $86.09 a barrel and natural gas prices increased 1 cent to $3.38 a thermal unit. 

The dollar index edged higher to 105.83, the level last seen in November 2022 and extended gains from the low of 99.85 on July 13, 2023.  

 

U.S. Stock Movers 

PepsiCo gained 1.5% to $163.81 after the beverage and food company reported its quarterly results and the company also lifted its full-year outlook. 

Palantir Technologies Inc increased 2.7% to $18.09 on news that the U.S. Army assigned a $250 million contract to test and develop artificial Intelligence tools.

Unity Software Inc jumped 4% to $30.88 after the company said chief executive John Riccitiello plans to retire and James M Whitehurst will step in as an interim chief executive. 

 

European Markets Rebounded, Bond yields Edged Lower  

Stock markets across Europe rebounded and bond yields edged lower a day after chaotic trading. 

Market indexes in London, Paris and Frankfurt advanced more than 1.5% and investors searched for bargains.

Market sentiment was also bolstered after crude oil prices edged lower and investors overlooked the jump in natural gas prices for the second day in a row. 

Natural gas prices in Europe soared to a six-month high following a 15% advance in Monday's trading after the Israeli government requested Chevron to shut production because of safety concerns at its Tamar natural gas field near its northern coast.

 

Europe Indexes & Yields

The DAX index increased 1.8% to 15,423.52, the CAC-40 index rose 2.0% to 7,162.42 and the FTSE 100 index advanced 1.8% to 7,628.21.

The yield on 10-year German bonds decreased to 2.8%, French bonds traded lower to 3.40%, the UK gilts edged down to 4.50% and Italian bonds rose to 4.85%.

The euro edged lower to a three-month low to $1.058, the British pound to $1.218 and the U.S. dollar fetched 90.81 Swiss cents.

Brent crude decreased $0.66 to $87.48 a barrel and the Dutch TTF natural gas edged higher by €5.50 to €49.46 per MWh.

 

Europe Stock Movers

Elis SA increased 3.8% to €16.89 after the Brazil-based asset manager BWGI said it plans to acquire a 6% stake in the French cleaning service provider. 

Euroapi  SAS plunged 56.5% to €5.34 after the Sanofi spinoff lowered its 2023 sales outlook. 

Eutelsat Communications SA rose 7.6% to €5.08 after the satellite company and a hybrid network provider Marlink signed a multi-year agreement to provide maritime connectivity over the Middle East, Africa and Europe. 

YouGov Plc soared 23.2% to 850.0 pence after the British polling company reported a jump in pre-tax profit for 2023 on improved revenue. 

Currys PLC rose 4.9% to 49.32 pence after the company said it has received several non-binding offers for its Kotsovolos business in Greece and Cyprus.

Croda international Plc increased 2.2% to 4,539.0 pence after several brokerage firms lifted their target stock price.

Rheinmetall AG advanced 1.5% to €254.20 after the German defense company won an order from German Bundeswehr to supply 150,000 rounds of artillery ammunition through a framework agreement.