1. Futures muted
US stock futures were muted on Tuesday as investors assessed a fresh batch of corporate earnings and geared up for quarterly reports from megacap technology names.
By 04:30 ET (08:30 GMT), the Dow futures contract had edged down by 55 points or 0.1%, S&P 500 futures had slipped by 5 points or 0.1%, and Nasdaq 100 futures were lower by 9 points or 0.5%.
The main averages ended the previous session higher, with traders preparing for the busy week that will see roughly 169 S&P 500 companies unveil their latest returns — including figures from the so-called “Magnificent Seven” group of tech industry giants like Alphabet and Facebook-parent Meta Platforms (NASDAQ:META).
Markets were also keeping an eye on the final frantic days of campaigning before the all-important Nov. 5 US presidential election. Donald Trump is currently being priced in to win a second four-year term in the White House, although polls remain tight.
Meanwhile, fears over a potential crunch in energy supplies were somewhat assuaged after Israel’s response to an Iranian missile attack earlier this month avoided oil refineries and nuclear targets.
2. Alphabet to report
Numbers from Alphabet are set to headline the earnings agenda on Tuesday and kick off a spate of returns from other massive tech players later this week.
Analysts expect growth at the company’s core Google Search unit and other related revenue to slow to 11.6% in the third quarter, down from an increase of 13.8% in the prior three-month period, according to Visible Alpha data cited by Reuters.
Such a slowdown would signal that Google’s dominance over the digital advertising market may be facing intensifying competition from rivals like e-commerce behemoth Amazon (NASDAQ:AMZN) and short-form video platform TikTok. The ascendence of artificial intelligence chatbots like OpenAI’s ChatGPT has also threatened to siphon away ad spending from Google, while federal regulators are now openly considering breaking up the division due to concerns that it has an “illegal monopoly” in online queries.
However, Google’s cloud computing business is tipped to expand at its fastest rate in seven quarters, reflecting soaring demand for the service as more firms spend heavily to build out large language models and fold AI into their operations. Any commentary from Google around its own AI ambitions will likely be in focus as well.
Shares in Alphabet slumped by around 9% in the three months ended in September, but remain up by more than 20% so far this year.
3. Ford sees annual profits at bottom end of prior guidance
Shares in Ford Motor (NYSE:F) sank in premarket trading after the US carmaker said its full-year income would be at the bottom end of its previously-announced guidance range.
Ford now expects adjusted earnings before interest and taxes, or EBIT, to come in at $10 billion for 2024 — an estimate at lower end of its prior outlookof $10 billion to $12 billion.
In a call with analysts, Chief Financial Officer John Lawler also suggested that the company would need to “accelerate” its cost-cutting plans in order to close a $2 billion “gap” in expenses with its competitors.
“We need to continue to make […] progress on material costs, our manufacturing costs, overall structural costs, as well as driving down […] warranty costs,” Lawler said.
4. Global earnings wave
Outside of the US, traders are keeping an eye on earnings from a host of large companies.
Spain’s Banco Santander (BME:SAN) reported an all-time high net profit in the third quarter as performance at the Eurozone’s third-largest bank was boosted by its retail service and cost control measures. But Santander UK, which typically reports its results separately, delayed the release of its earnings because of a London court ruling on motor finance brokers.
Asia-focused lender HSBC booked a stronger-than-expected third-quarter profit amid sustained strength in its wealth management unit, while a string of recent cost-cutting and restructuring measures bore fruit. The bank announced a $3 billion buyback as well.
Elsewhere, BP (NYSE:BP) logged its lowest quarterly income since the COVID-19 pandemic due to a decrease in oil prices and tepid refining margins. But the FTSE 100-listed energy major still said it would repurchase another $1.75 billion of shares, sticking to a pledge to buy back $7 billion in stock this year.
5. Oil steadies after steep declines
Oil prices steadied after the previous session’s sharp losses, with the tense situation in the Middle East the main driving force.
By 04:31 ET, the Brent contract climbed 0.5% to $71.34 per barrel, while U.S. crude futures (WTI) traded 0.5% higher at $67.69 a barrel.
Both benchmarks slumped 6% on Monday to their lowest since Oct. 1 after Israel’s retaliatory strike on Iran at the weekend bypassed Tehran’s oil infrastructure, avoiding the disruption of supplies from this crude-rich region.
Helping the tone was Monday’s news that the U.S. was seeking up to 3 million barrels of oil for the Strategic Petroleum Reserve for delivery through May next year.
(Reuters contributed reporting.)
Source: Economy - investing.com
