As Alphabet Inc. (GOOGL, Financial), Google's parent company and one of the "Big Seven" tech giants, prepares to release its earnings report, the busiest week of the U.S. corporate earnings season reaches its peak. Investors are also focused on key economic data impacting the Federal Reserve's upcoming rate decision and the imminence of the U.S. presidential election.
Dow Jones futures fell 0.28%, S&P 500 futures dropped 0.08%, while Nasdaq futures edged up 0.01%. European markets showed mixed results, with Germany's DAX up 0.31%, UK's FTSE 100 rising 0.08%, France's CAC40 gaining 0.34%, and the Euro Stoxx 50 up 0.23%. In commodities, WTI crude increased by 1.17% to $68.17 per barrel, whereas Brent crude fell 1.14% to $71.81 per barrel.
This week, companies representing nearly 42% of the S&P 500's market value will disclose their earnings, including five of the seven major tech giants that have driven the stock market's surge this year. The earnings reports from these tech giants are the main focus on Wall Street. Alphabet (GOOGL, Financial) will set the stage, followed by Meta and Microsoft on Wednesday, and Apple and Amazon on Thursday.
Charu Chanana, Chief Investment Strategist at Saxo Markets, noted that the short-term focus is on tech giant earnings led by Google, with market expectations that AI spending will continue being a crucial driver for stock market growth.
Amidst this, IG market analyst Tony Sycamore emphasized the lack of market drivers, cautioning against taking risks during this challenging period. In a broader context, there is market anticipation about the potential return of Trump to the White House, as most polls show a tight race between Trump and Vice President Harris. Bitcoin has surged past $71,000 for the first time since June, driven by the perception of Trump as a pro-cryptocurrency candidate.
A Bloomberg market survey suggests that a Trump victory would favor stocks and Bitcoin, while a Harris presidency might slightly ease housing costs. About 38% of respondents expect a Republican win would boost the stock market within a year, compared to only 13% for a Democratic win.
Phillip Wool, Head of Portfolio Management at Rayliant Global Advisors, indicated that Trump's odds are improving, which could be positive for U.S. stocks in the short term. He pointed out that fiscal deficits could rise, and inflation might slow the Federal Reserve's rate cuts, which would pressure the dollar upwards.
Meanwhile, global investment firms caution that a Trump win might slow global economic growth. Singapore's state investment company, Temasek, warned that a Trump presidency could hinder world economic growth, ultimately affecting U.S. businesses.
As the U.S. presidential election approaches, investors worldwide remain tense. A recent survey highlights that Trump’s victory would be more beneficial for stock and Bitcoin investors than his Democratic rival Harris.
Goldman Sachs noted that the end of the year is typically a strong period for U.S. equities. Despite election-related concerns reflected in the elevated VIX, Goldman’s Managing Director Scott Rubner believes that the anticipated market correction may not occur, with the stock market likely climbing towards year-end, in line with seasonal trends. November and December traditionally are strong months for stock market returns.
Highlighted Stocks: Several crypto-related stocks saw pre-market gains, with ProShares Bitcoin Strategy ETF up 2.2% and iShares Bitcoin Trust rising 2.1%. Ford Motors shares fell nearly 6% pre-market due to a significant drop in Q3 net profit and a lowered annual forecast. Pfizer shares gained 3.5% pre-market after exceeding earnings expectations. Conversely, NextEra Energy fell over 4% after announcing plans to raise $1.5 billion through equity unit sales.
PayPal (PYPL) dropped nearly 8% pre-market despite exceeding earnings expectations, while Camping World surged nearly 10% on impressive Q3 results. V.F. Corporation jumped over 21% pre-market, turning profitable in Q2. F5 Inc rose over 11% on strong earnings and a $1 billion buyback authorization.
Stocks also gaining attention include Kingsoft Cloud, NIO, Ke Holdings, Pinduoduo, Alibaba, and Miniso, all showing various degrees of pre-market increases based on positive developments and analyst upgrades.
