U.S. stocks opened higher on Tuesday, led by technology stocks, as upbeat earnings from blue-chip companies helped ease jitters over the impact of an ongoing U.S.-China trade war and other global issues on corporate profits. The Dow Jones Industrial Average rose 100.98 points, or 0.40 percent, at the open to 25,351.53. The S&P 500 opened higher by 16.26 points, or 0.59 percent, at 2,767.05. The Nasdaq Composite gained 71.04 points, or 0.96 percent, to 7,501.78 at the opening bell.
Goldman Sachs (N:GS) reported a better-than-expected quarterly profit on Tuesday, driven by its equities trading and investment banking businesses that offset weakness in bond trading. This is Goldman's last quarterly results under Lloyd Blankfein, who led the company as chief executive for 12 years before handing over the reins to David Solomon in October. The bank said fixed income, currency and commodity trading revenue fell 10 percent to $1.31 billion. Goldman is typically more sensitive to swings in market volatility than its peers because its large trading business overshadows its other banking units. Revenue from equities trading rose 8 percent to $1.79 billion. At Morgan Stanley (N:MS), Goldman's traditional rival, revenue from equity trading rose 6 percent, while bond trading rose marginally. Revenue from Goldman's investment banking business rose 10.2 percent, while its overall net revenue rose 3.8 percent to $8.65 billion. Net earnings attributable to common shareholders rose to $2.45 billion, or $6.28 per share, in the third quarter ended Sept. 30 from $2.04 billion, or $5.02 per share. Analysts on average were looking for $5.38 per share, according to I/B/E/S data from Refinitiv.
Saudi Arabia stocks were higher after the close on Monday, as gains in the Media & Publishing, Agriculture & Food and Petrochemicals sectors led shares higher. At the close in Saudi Arabia, the Tadawul All Share rose 4.14%. The best performers of the session on the Tadawul All Share were Saudi Industrial Export Co (SE:4140), which rose 10.00% or 6.30 points to trade at 69.30 at the close. Meanwhile, National Gas & Industrialization Co (SE:2080) added 10.00% or 2.60 points to end at 28.60 and Saudi Arabia Fertilizers Co. (SE:2020) was up 10.00% or 7.30 points to 80.30 in late trade. The worst performers of the session were Al Baha Investment and Development Company SJSC (SE:4130), which fell 10.00% or 1.70 points to trade at 15.30 at the close. Saudi Cable Company (SE:2110) declined 2.12% or 0.70 points to end at 32.30 and Etihad Atheeb Telecommunication (SE:7040) was 0.00% or 0.000 points to 5.350. Rising stocks outnumbered declining ones on the Saudi Arabia Stock Exchange by 180 to 3 and 2 ended unchanged. Shares in Saudi Industrial Export Co (SE:4140) rose to 52-week highs; gaining 10.00% or 6.30 to 69.30. Shares in Saudi Arabia Fertilizers Co. (SE:2020) rose to 52-week highs; up 10.00% or 7.30 to 80.30. Crude oil for November delivery was up 0.53% or 0.38 to $71.72 a barrel. Elsewhere in commodities trading, Brent oil for delivery in December rose 0.67% or 0.54 to hit $80.97 a barrel, while the December Gold Futures contract rose 0.49% or 6.00 to trade at $1228.00 a troy ounce. EUR/SAR was up 0.29% to 4.3488, while USD/SAR rose 0.03% to 3.7519. The US Dollar Index Futures was down 0.20% at 94.75.
The pound was pressured lower on Monday as talks aimed at reaching a Brexit deal ended in a stalemate, while the safe haven yen strengthened as equity markets started the week lower amid ongoing concerns over rising U.S. yields and trade tensions. GBP/USD was down 0.28% to 1.3119 by 04:49 AM ET (08:49 AM GMT), while EUR/GBP was up 0.2% to 0.8810. The pound came under pressure after talks between Britain’s Brexit Secretary Dominic Raab and the European Union’s chief Brexit negotiator Michel Barnier ended in a stand-off ahead of Wednesday’s EU leaders summit. The lack of progress towards a Brexit deal added to a cocktail of geopolitical risks weighing on market sentiment. Markets were watching developments in the euro zone, where Italy’s government was expected to approve its new budget, despite criticism from Brussels that it will breach EU fiscal rules. A Bavarian state parliament election on Saturday saw the ruling Christian Social Union party lose its majority, in a blow to German Chancellor Angela Merkel’s government. Meanwhile, oil prices were pushed higher by rising diplomatic tensions between Saudi Arabia and the West over the disappearance of a journalist. Global equity markets failed to rebound on Monday, despite Friday’s gains on Wall Street after a sharp selloff last week triggered by worries over rising U.S. yields and concerns that trade wars are starting to act as a drag on global growth. The safe haven yen gained ground, with USD/JPY down 0.45% to 111.70. The Swiss franc, also sought as a refuge in times of market turmoil, was higher against the dollar with USD/CHF down 0.3% to 0.9900. The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, dipped 0.08% to 94.86.
U.S. futures pointed to a sharply lower open on Wall Street on Thursday as a global selloff spurred by fears over rising bond yields, slowing global growth and trade tensions picked up speed. The S&P 500 futures were down around 25 points or 0.91% by 6:36 AM ET (10:36 GMT), while Dow futures were down 262 points, or 1.03%. The tech heavy Nasdaq 100 futures shed 65 points, or 0.92%. The losses came after the largest decline for U.S. stocks in more than eight months on Wednesday, as rising U.S. Treasury yields and widespread risk aversion spurred a flight from risky assets. Treasury yields started to climb last week amid expectations for a faster than expected pace of rate hikes from the Federal Reserve as the outlook for the U.S. economy remains strong. The sharp falls on Wall Street prompted U.S. President Donald Trump to renew his recent criticism of the Fed on Wednesday, calling it “crazy” for its plans to continue with gradual rate hikes in the coming months. The president also said that Wednesday's stock market sell-off was in fact a long-awaited "correction." "Actually it's a correction that we've been waiting for a long time, but I really disagree with what the Fed is doing,” Trump added. Technology stocks remained in focus, after being particularly hard hit on Wednesday. FAANG stocks were broadly lower, with Amazon (NASDAQ:AMZN) down around 2% premarket and Netflix (NASDAQ:NFLX) off 1.5%. Facebook (NASDAQ:FB) was down 1.6% ahead of the open. In bond markets, U.S. Treasury prices edged higher, pushing yields lower across the curve, with the benchmark 10-year yield falling to 3.16% Investors were awaiting the September report on U.S. consumer prices set for release at 8:30AM ET (1230GMT). Consumer prices are expected to have risen 0.2% last month and 2.4% over the prior year, according to estimates. In Europe, London’s FTSE100 fell into correction territory, having lost more than 10% of its value since hitting an all-time high in May. Meanwhile, the VIX volatility index hit its highest level since April. Overnight in Asia, China’s stock market closed at its lowest level in almost four years, as worries over the trade war with the U.S. continued to weigh. In commodities markets, oil headed for the largest two day decline since July ahead of the weekly report on U.S. oil inventories from the U.S. Energy Information Administration at 11:00AM ET. The U.S. dollar index which measures the greenback against a basket of six major currencies was down 0.4% to a one-and-a-half week low of 94.84.
Italy paid its highest borrowing rate in five years in a bond auction on Thursday after its new populist government alarmed investors by tripling the budget deficit target for next year. Some investors fear Rome is sowing the seeds of a future debt crisis by pushing ahead with costly electoral promises such as a lower retirement age and a basic income for the poor. Italy holds the world's third-largest public debt burden. In Thursday's auction the Treasury sold a new three-year bond at a yield of 2.51 percent, the highest since September 2013, though demand for this and other issues was strong. Public debt runs at 1.3 times economic output in Italy, a country that suffers from chronically low growth. The ruling coalition came to power in June, promising to kickstart economic growth and tackle rising poverty with higher public spending. Despite the jump in borrowing costs, continued strong demand for Italian paper calmed fears in the market, with yields on existing bonds dipping on the auction results. "Demand at the auction was good, though you have to remember that the size of the issue was contained and this really helped," said Luca Cazzulani, deputy head of fixed-income strategy at UniCredit. The treasury raised 6.5 billion euros ($7.5 billion), the maximum it had set itself ahead of the auction, by issuing bonds maturing over three, seven, 15 and 30 years. The yield on the seven-year bond at auction was a record since Italy began issuing this maturity in January 2014. The 2019 budget plan has ignited concerns at the European Commission, and among Italy's euro zone partners, that Rome's spending could undermine the single currency. Some independent Italian state bodies have also raised alarms. Italy's INPS says that planned pension changes would raise pension debt by about 100 billion euros while parliament's budget oversight agency says the government's economic growth forecast is overly optimistic. The government targets a budget deficit of 2.4 percent of domestic output next year, three times the level set by the previous center-left executive. Investors are now nervously awaiting updates on Italy's creditworthiness from rating agencies, with Standard & Poor's due to review its "BBB" rating on Oct. 26. Moody's will decide by the end of October whether to downgrade Italy after placing its rating on review for a possible cut after the new coalition's spending plans first surfaced.
A rally in the dollar paused on Wednesday, as U.S. Treasury yields held below their recent seven-year highs, but demand for the greenback continued to be underpinned by expectations for a potentially faster pace of rate hikes from the Federal Reserve. The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was holding steady at 95.4 by 04:13 AM ET (08:13 AM GMT), holding below a seven-week high of 95.84 reached in the previous session. The dollar paused as the yield on 10-year Treasury notes eased after touching fresh seven-and-a-half year highs on Tuesday. The sell-off in Treasuries has been spurred by expectations that the Fed will continue to raise rates in December and beyond as the outlook for the economy remains strong. Rising bond yields have hit demand for stocks in recent sessions, souring risk appetite. The dollar pushed higher against the yen, with USD/JPY rising 0.15% to 113.11. The euro was little changed, with EUR/USD at 1.1490, holding above the previous session’s seven-week lows of 1.1431. The single currency remained on the back foot amid an ongoing row between Italy’s populist government and the European Commission over the country’s budget plans. Brussels and Rome have been at odds over the country's budget deficit plans for the next three years, which breach EC rules on running excessive deficits and high debt. The row has seen Italian bond yields rise amid fears that the decision to increase borrowing will prove unsustainable given the country’s debt load. Meanwhile, the pound was a touch higher, with GBP/USD rising 0.12% to 1.3159 following reports that the terms of the UK’s exit from the European Union could be settled as early as next week.
United Arab Emirates stocks were mixed after the close on Wednesday, as gains in the Real Estate & Construction, Banking and Insurance sectors led shares higher while losses in the Consumer Staples, Finance & Investment and Telecoms sectors led shares lower. At the close in Dubai, the DFM General gained 1.18%, while the ADX General index fell 0.12%. The best performers of the session on the DFM General were Dubai Islamic Insurance Co. (DU:AMAN), which rose 4.81% or 0.028 points to trade at 0.610 at the close. Meanwhile, Damac Properties Dubai Co PSC (DU:DAMAC) added 3.57% or 0.070 points to end at 2.030 and National Central Cooling Co. (DU:TABR) was up 3.23% or 0.050 points to 1.600 in late trade. The worst performers of the session were Drake & Scull International PJSC (DU:DSI), which fell 2.64% or 0.011 points to trade at 0.405 at the close. AJMAN BANK PJSC (DU:AJBNK) declined 2.11% or 0.020 points to end at 0.930 and Union Properties PJSC (DU:UPRO) was down 1.33% or 0.009 points to 0.667. The top performers on the ADX General were Arkan Building Materials Co PJSC (AD:ARKN) which rose 1.92% to 0.5300, Ad Natl Energy (AD:TAQA) which was up 0.88% to settle at 1.140 and Rak Properties (AD:RPRO) which gained 0.66% to close at 0.615. The worst performers were Eshraq Properties Co PJSC (AD:ESHR) which was down 1.56% to 0.5680 in late trade, Dana Gas (AD:DANA) which lost 0.86% to settle at 1.150 and International Holding Company PJSC (AD:IHC) which was down 0.84% to 1.18 at the close. Falling stocks outnumbered advancing ones on the Dubai Stock Exchange by 17 to 14 and 4 ended unchanged; on the Abu Dhabi, 10 fell and 8 advanced, while 2 ended unchanged. Shares in Union Properties PJSC (DU:UPRO) fell to 52-week lows; falling 1.33% or 0.009 to 0.667. Crude oil for November delivery was down 0.20% or 0.15 to $74.81 a barrel. Elsewhere in commodities trading, Brent oil for delivery in December fell 0.22% or 0.19 to hit $84.81 a barrel, while the December Gold Futures contract rose 0.02% or 0.20 to trade at $1191.70 a troy ounce. USD/AED was unchanged 0.00% to 3.6732, while EUR/AED rose 0.03% to 4.2230. The US Dollar Index Futures was down 0.01% at 95.35.
Ford (N:F) has chosen Omnicom's (N:OMC) BBDO as its lead creative advertising agency in a symbolic blow to its partner of 75 years, WPP (L:WPP). The British group, the world's largest advertising company, is in the process of rebuilding after the sudden departure of its founder Martin Sorrell earlier this year. New boss Mark Read is planning fresh investment in the creative talent of its big agencies as the broader industry goes through a period of unprecedented change. Clients are increasingly taking work in house and using the giant online platforms of Google (NASDAQ:GOOGL) and Facebook (NASDAQ:FB) to reach consumers. Named as 2018 Network of the Year at the annual Cannes awards, the New York-based BBDO replaces WPP on the creative front at Ford from November 1, while independent agency Wieden + Kennedy will also be a creative partner on some projects. WPP, which has worked with Ford since 1943, has however retained much of Ford's most profitable work, such as media planning and buying and customer retention following a five-month review by the automaker. It also frees up the group to bid more aggressively for work with other auto makers. Its shares were down 0.9 percent at 0930 GMT. Liberum analyst Ian Whittaker said the financial impact on WPP would be limited, as it had lost only less profitable creative work, although the decision could spark questions as to whether it is the beginning of the end for WPP's tight relationship with Ford. "The greater impact is more symbolic than anything else - Ford has been WPP's flagship client and, with the departure of Martin Sorrell, there will be inevitable questions over whether that was a factor," he said. NEW IDEAS Ford, the No. 2 U.S. automaker, is looking for new ideas after struggling with slumping sales, weak demand in Europe and trade tariffs with China, forcing it to cut costs. "Today is a big big day," BBDO Worldwide said on Twitter. "We have a wonderful new brand to help build." Like many other big ad spenders, Ford said it would also create more than 100 new in-house global marketing positions, a trend that has stripped the big advertising groups of some of their income in recent years. WPP, which had created an entire agency to support Ford, said it would continue to handle some advertising work for the car giant in the U.S., the China advertising operations, advertising for Ford's luxury vehicle brand Lincoln and all Ford's public relations. The sudden departure of Sorrell, who built WPP into an advertising giant through 33 years of dealmaking, prompted fears that without his contacts WPP could lose clients. Major WPP clients have put a raft of work out for review this year, putting pressure on the market leader. It has retained ties with Sky (L:SKYB) and BP (L:BP) but lost HSBC (L:HSBA). WPP owns some of the most storied names in advertising, such as JWT, Ogilvy, Grey and Y&R. It combines these with data analytics, media planning, public relations and consultancy work and had outperformed peers for several years until 2017. Clients such as Unilever (LON:ULVR) have also called for WPP to simplify its offering and provide an integrated service, rather than different strands of work via multiple agencies.
The dollar edged higher against a currency basket on Tuesday and the safe haven yen remained steady in cautious trade as rising U.S. bond yields and concerns over the outlook for global growth weighed on risk appetite. The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was up 0.17% to 95.60 by 03:57 AM ET (07:57 AM GMT), not far from a six-week high of 95.78 reached last week. Demand for the dollar was underpinned as the move higher in U.S. Treasury yields continued, albeit at a slower pace than last week, sending the yield on 10-year Treasury notes to a fresh seven-year peak. The sell-off in Treasuries has been spurred by expectations for a potentially faster pace of rate hikes from the Federal Reserve. Rising bond yields have hit demand for stocks in recent sessions, souring risk appetite. The safe haven yen was holding steady against the dollar, with USD/JPY at 113.30 as investors also focused on the economic impact of the U.S.-China trade war and worries over the political situation in Europe. The International Monetary Fund cut its global growth forecast on Tuesday, warning that trade conflicts are starting to have a serious impact on the global economy. The IMF downgraded its outlook for the U.S., China, the euro zone and the UK, saying it now expects the global economy to expand by just 3.7% in 2018 and 2019, down from 3.9% before. The euro was hovering near last week’s one-and-a-half month lows, with EUR/USD slipping 0.14% to 1.1475 amid worries that the Italian government’s spending plans could trigger another round of the country’s debt crisis. The single currency was also weaker against the yen, with EUR/JPY at 130.06, within striking distance of Monday’s almost one-month lows of 129.51. Sentiment on the euro was also hit after data showing that German exports fell unexpectedly in in August, adding to concerns over a loss of momentum in the euro area’s largest economy. Sterling was a touch lower, with GBP/USD dipping 0.11% to 1.3075 amid ongoing uncertainty over what sort of deal Britain will secure before its exit from the European Union.