Summary:
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USD trades higher despite sluggish data
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US equities indices surge in the first hour of trading session
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Tesla (TSLA.US) and Twitter (TWTR.US) shares jumped on stellar earnings reports
The US stock market saw a green opening today with all major indices from Wall Street being subject to significant gains. The US dollar is also trading higher against majority of its peers despite weaker than expected data from the World’s biggest economy.
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Durable goods orders declined sharply in September. Source: xStation5
The first pack of the US data was released at 1:30 pm BST. Preliminary durable goods orders and wholesale inventories data for September was included as well as the trade balance data. The reading came in as follow:
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Durable goods orders: 0.8% MoM, expected -1.5% MoM, prior reading revised higher from 4.4% MoM to 4.6% MoM
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Durable goods orders excluding transportation: 0.1% MoM, expected 0.4% MoM, prior reading revised higher from 0% MoM to 0.3% MoM
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Wholesale inventories: 0.3% MoM, expected 0.5% MoM, prior reading revised lower from 1% MoM to 0.9% MoM
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Advance goods trade balance: -$76 billion, expected -$75.1 billion
As one can see majority of readings came in weaker than expected. Trade balance data is especially interesting as it shows that efforts to lower the deficit with tariffs and other protectionist measures fail to produce expected results. Hour and a half later the pending home sales data was published but it also disappointed. Nevertheless, the US dollar was fairly muted to the data releases but moved significantly higher during the ECB press conference.
The US equity market took a hit throughout the past month with US500 dropping around 9% during the period. Nevertheless, the sell-off was halted in the vicinity of 2675 pts handle and the index is eyeing a bounce higher. In case the recovery is to extend the resistance zone ranging 2735-2745 pts is a level to watch. Source: xStation5
As we have mentioned earlier the US equity indices are pushing higher today. The biggest gains are achieved by Nasdaq (US100) followed by S&P 500 (US500) and Dow Jones (US30). The upbeat moods observed in Europe helped lift the US benchmarks while the good corporate earnings reports also played their part. Stellar reports from Twitter and Tesla placed car makers and entertainment companies among the best performing industry groups from the S&P 500 index.
Top moving industry groups from the S&P 500 index. Source: Bloomberg
Company News
Tesla (TSLA.US) released its third quarter earnings report yesterday after market close. The company surprised investors by showing net profit of over $500 million while consensus pointed at $49 million loss. Revenue came in at $6.824 billion while markets expected $6.315 billion. Another huge surprise resulted from EBITDA figures as they came in at $1.124 billion, over 60% higher than median estimate. Having in mind that Tesla was famous for its cash burning abilities no one should be surprised that such a strong numbers lifted company’s share price significantly. However, after opening at two-month high in the vicinity of $320 handle the stock began to erase gains.
Another stock having strong bullish momentum today is Twitter (TWTR.US). Twitter continued to experience decline in the number of monthly active users. However, it was expected as the company warned against it in its previous quarterly earnings report. Nevertheless, the company provided solid beat in the earnings numbers. Net income came in at $162.718 million against expected $103.21 million. The revenue reached $758.111 million in three months ended in September. The stock is trading over 15% higher against yesterday’s close.
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