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US stocks are now witnessing slight fluctuations, as Wall Street reacted to the resignation of the British Prime Minister, along with US unemployment and housing data, to enter into a general wave of mixed ups and downs, but is now settling on the upside.
US stocks are trying to benefit from a crucial week, because it is witnessing a number of earnings announcements for a number of companies listed on the US market, and US stocks have already achieved a number of gains during the past few days.
The third quarter earnings season begins with companies releasing earnings reports in a challenging environment due to a strong dollar and persistently high inflation.
Reuters reported that earnings are expected to rise in the S&P 500 index by 4.1% compared to the previous period, marking the slowest period of growth since the fourth quarter of 2020.
But the market is now focused on future executive projects, and analysts estimate an 8% rise in profits over the next year, according to Refinitiv data, but investors are skeptical about the validity of the forecast in light of the long recession.
A stock market liquidation took place causing stock valuations to fall, but any dip in earnings expectations would destroy any remaining market attractiveness.
Urgent: Unemployment data gives the Fed the green light towards more violent extremism
The Fed should not interact with stocks
US Federal Reserve Bank of St. Louis James Bullard made some comments, Thursday, and said: "It is not clear whether stock pricing should be the primary measure of financial liquidity."
"The US Federal Reserve should not react to dips in the stock market," Bullard added.
With regard to interest rates, Bullard said: “The US Federal Reserve should act more aggressively if inflation does not fall in line with expectations. He stressed that there is nothing to prevent the US Federal Reserve from raising interest rates by 75 basis points at each of its next meetings in November and December. It's too early to say how much interest rates will be raised during the December meeting."
Tech and US stocks are becoming more attractive, strategists at Citigroup said, in light of expectations of a slowdown in the global economy next year.
The bank expected global stocks to rise 18% at the end of 2023, but warned that stock markets would witness some fluctuations.
He added that investors' attention will increasingly shift to risks on stock returns, noting that they should continue to prefer defensive stocks as well as cyclical stocks.
A different point of view... unattractive
“With the S&P 500 trading 2% above our primary year-end target at 3600 and 17% above the downside target for a hard landing scenario at 3150, the risk of owning a broad US equity index is unattractive,” Goldman Sachs said.
(NYSE:GS) added: "But selling 25% in the stock market means there are deals to be made in certain sectors, even if valuations remain above historical averages."
According to Goldman Sachs analyst David Kostin: “Investors should look at small-cap stocks and value stocks,” Kostin said: “Short-term value stocks look attractive relative to long-term and growth stocks...provided interest rates remain high.”
Unemployment, manufacturing and housing data
Unemployment claims fell to 214K, missing expert expectations, when it was expected to come in at 230K. Especially as it recorded 226K last week.
As a result, the 4-week average of jobless claims rose to 212.25K.
The US manufacturing data came in negative this time as the Philadelphia Manufacturing Index declined in October to -8.7 after it was estimated to come in at -5 only.
Home sales in America recorded 4.71 million homes in September, down from the previous month, when it recorded 4.78 million homes in August, indicating a slowdown in the real estate market in America.
US stocks recorded slight gains now in early trading on Thursday, affected by the decline in the dollar and the start of the week of corporate earnings reports.
The Dow Jones is now up by 311 points, or about 1%, to record 30,735 points. The S&P index rose 33 points, or nearly 1%, to 3,728 points.
While the Nasdaq index jumped by about 1.5%, or 165 points, to record 11,268 points.
US stocks are trying to recover from the wave of hawkish comments by Fed members, which in turn supports the dollar against the rest of the assets.
The spot contracts for gold, the US dollar, jumped strongly during the current moments at levels near 1645 dollars for an ounce, up by 1%.
On the other hand, futures contracts for the yellow metal rose during these moments of today's trading, equivalent to 1% as well, rising to levels near $1650 an ounce.
The dollar index fell in the current moments, reacting to the rise of gold, oil and other assets.
The dollar index now recorded the 112 levels, down by 0.72%.
Meanwhile, the 10-year US Treasury bond yield rose by 0.37% to 4.144.
The US light NYMEX crude rose during these moments to the levels of 86 dollars per barrel, by 1.9%.
On the other hand, Brent crude rose to levels of $ 94, by 1.6 percent, during these moments of today's trading.
634 . viewsAdded 10/20/2022 - 9:45 PMUpdate 10/21/2022 - 12:48 PM[You must be registered and logged in to see this link.]