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The Dow is tracking for the best October in 6 years and third-quarter earnings are strong so far. What could be wrong?


A traditionally troubled month is going to be something else for the stock market … so far. Based on the way things ended last month, and at the beginning of the first full week of October, investors are now sitting pretty well, who would have thought? Of course not Dennis Gertman.

Still, we are here. Look at us, as actor Paul Rudd might say.

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In fact, the Dow Jones Industrial Average DJIA
Factset data shows it has risen 6.62% for its best month since March.

The rally, which is usually one of the weakest months of the year, saw blue-chips close at 35,625.40, up 1% from the August 16 record. And our colleagues at Dow Jones Market Data say the index’s performance represents the best start to October 2015 so far.

S&P 500 SPX
1.45% off a record high of 4,536.95 and closed at the Nasdaq Composite Comp.
September 7 to 3.1% is the all-time high at 15,374.33.

According to John Butters, senior earnings analyst at Factset, this is a very early day, with only 8% of S&P 500 index companies reporting third-quarter results, but at least 80% of companies are losing earnings and revenue expectations.

Butters says the S&P 500 company’s reported mixed growth rate (estimates and actual results) is 30%, which, if it holds, would represent a rate of earnings growth over more than a decade.

On top of that, a mixed net profit of 12.3% would mark the third highest recorded by Factset since it began tracking that metric in 200 met. June0 June, the estimated third quarter net profit was 12%.

Factset

It certainly didn’t hit the JPMorgan Chase JPM,
Goldman Sachs GS,
Bank of America BAC,
Citigroup c,
Wells Fargo WFC
And Morgan Stanley MS,
Butters said some of the country’s largest banks have made earnings estimates.

To be sure, while this is not a completely clear signal for bulls, investors are still concerned about rising inflation, stagnation, the story of the evergreen-fueled China property, and other concerns centered on the ongoing energy crisis.

However, higher growth in U.S. stocks has denied the gravitational pull of those bearish factors. Maybe thanks to bull investor and market prognosticator Dennis Gartman, who declared the bull market dead after a particularly bad day in October.

That prediction may still be true but market analyst and founder of NorthmanTrader.com, Sven Henrich, was not going to miss the opportunity to rib Gartman.

Views: Marketwatch and Barons are also gathering the most influential figures in crypto to help identify the opportunities and risks facing digital assets on 2 October and 3 November.

However, the market is far from the forest. The Federal Reserve appears to have begun to reduce monthly purchases of treasury and mortgage-backed securities.

And Marketwatch’s Vivien Lu Chen writes that the strong U.S. inflation data expected for September considers the risk to bond investors that the Federal Reserve may be forced to tighten interest rates in a stable economy with permanently high price increases.

Fed Chairman Jerome Powell will deliver a speech this coming weekend that will mark the final comments from policymakers before the central bank’s November 2-3 policy meeting, when it will be possible to reduce its bond purchases.

Another pop in the 10 year treasury will be BX: TMUBMUSD10Y
Growth or technology stocks off more profits? Will the US dollar return to new heights? Will the corporation’s bad direction and continued profit constraints eventually darken the mood on Wall Street? Even Gartman doesn’t know.

But for now, the bulls are riding high in October.

What’s in the US economic data this week?

Monday

  • Morning for September: 15 minutes industrial production and power utilization rate data

  • National Association of Home Builders Index or October at 10 a.m.

Tuesday

Building permits and accommodation start at half past one in September

Wednesday

Fed Base Book at 2 p.m.

Thursday

  • Initial unemployment claim at half past one in the morning

  • The Philadelphia Fed Production Index for October at 1:30 p.m.

  • Current home sales for September are at 10 p.m.

  • Leading economic indicators at 10 am

Friday

A flash reading of PMI and service creation from IHS Market at 9:45 a.m.

Earnings report for viewing this week

Tuesday

  • Johnson & Johnson JNJ,

  • Procter & Gamble Co PG

  • Travelers TRV

  • Netflix NFLX

Wednesday

  • Verizon Communications VZ

  • IBM IBM

  • Tesla Inc. TSLA

  • Baker Hughes Co. BKR

  • Biogen Inc. BIIB

  • United Airlines Holdings UAL

  • Las Vegas Sands Corporation LVS

Thursday

  • Intel Corporation INTC

  • American Airlines Group Inc. AAL

  • Southwest Airlines Co. LUV

  • AT&T

  • Chipotle Mexican Grill Inc. CMG

  • Tractor Supply Co. TSCO

  • Snap-on SNA

  • Keycorp. The key

Friday

  • American Express Co. AXP

  • Honeywell International Inc. HON

  • Whirlpool Corp. WHR

  • Seagate Technology Holdings STX



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