Wall Street is primed for a positive start on Friday, with the major averages poised for gains after a narrowly mixed session the day before. The tech sector, in particular, is expected to see a boost following Netflix, Inc.’s (NFLX) strong earnings report. This positive sentiment is likely to carry over into next week, as a flurry of earnings news from the tech sector is anticipated.
However, the day’s trading activity will be heavily influenced by a number of factors. Earnings reports, along with speeches from Federal Reserve officials, will be closely watched, setting the tone for Friday’s trading.
Encouraging news from China, where third-quarter GDP growth slightly surpassed estimates, has helped to alleviate investor anxieties. Gold continues its record-breaking run, while oil prices remain volatile amid ongoing geopolitical tensions.
Futures Point Upwards
Pre-market trading on Friday shows a positive outlook. The SPDR S&P 500 ETF Trust (SPY) is up 0.23% at $583.61, while the Invesco QQQ ETF (QQQ) has jumped 0.51% to $493.75, according to Benzinga Pro data.
Mixed Session on Thursday
Thursday’s trading session saw a mixed bag of economic data and earnings reports, leading to some volatility. While the major indices opened higher, they experienced fluctuations throughout the morning, ultimately closing with mixed results.
The Dow Industrials, boosted by a positive reaction to Travelers Companies, Inc.’s (TRV) earnings, closed at fresh intraday and closing highs. However, the S&P 500 Index, despite hitting an intraday high, gave back all its gains and closed slightly lower.
Positive Economic Outlook
Analysts remain optimistic about the overall economic landscape. Following the release of strong September retail sales growth, a decline in jobless claims, and a decrease in industrial production despite the Boeing Co. (BA) strike, Comerica Chief Economist Bill Adams stated, “The economy is in pretty good shape.”
Adams emphasizes the importance of consumer spending, noting that “since consumer spending fuels two-thirds of U.S. demand, the economy can’t be doing too bad as long as consumers still have their pocketbooks open.” While he expects the hurricanes that struck the Southeast in late September and early October to negatively impact October releases, Adams considers these headwinds temporary. He anticipates that continued interest rate cuts by the Federal Reserve will stimulate credit-sensitive sectors, ultimately extending the economic expansion into 2025.
Housing Starts and Fed Speeches in Focus
Today’s economic calendar features the release of the housing starts report for September at 8:30 a.m. EDT. Economists are forecasting a seasonally adjusted annual rate of 1.35 million units, slightly down from August’s 1.36 million units. Building permits, a leading indicator of future housing starts, are expected to decline from 1.48 million units to 1.45 million units.
Several Federal Reserve officials are scheduled to speak today, including Atlanta Fed President Raphael Bostic at 9:30 a.m. EDT, Minneapolis Fed President Neel Kashkari at 10 a.m. EDT, and Fed Governor Christopher Waller at 12:10 p.m. EDT. The Atlanta Fed’s GDPNow data for the third quarter will be released at 10:30 a.m. EDT.
Stocks to Watch
Netflix’s strong earnings have propelled its shares up approximately 5.75% in premarket trading. Other notable companies reporting earnings today include Intuitive Surgical, Inc. (ISRG), up nearly 7%, and Western Alliance Bancorporation (WAL), down over 5.25%.
Ally Financial Inc. (ALLY), Autoliv, Inc. (ALV), Fifth Third Bancorp (FITB), Procter & Gamble Company (PG), Regions Financial Corporation (RF), Schlumberger Limited (SLB), and American Express Company (AXP) are among the companies releasing their earnings ahead of the market opening.
CVS Health Corporation (CVS) has fallen over 10% after reports that longtime executive David Joyner will succeed Karen Lynch as CEO. Coherent Corp. (COHR) is down over 6% due to a negative analyst action.
Commodities and Global Markets
Crude oil futures have experienced a modest pullback, while gold futures have reached a new record high. Bitcoin (BTC/USD) has gained over 1.50% in the past 24 hours, trading just under the $68K mark. The 10-year U.S. Treasury note yield remains relatively unchanged at 4.097%.
Asian markets closed mostly higher, led by China and Hong Kong, which rallied on the back of the Chinese third-quarter GDP data. The Japanese market benefited from the yen’s weakness. The European Central Bank’s rate cut also contributed to positive sentiment. European markets have also advanced in early trading, although the U.K. market is experiencing some weakness.
