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Wall Street has its main indexes falling as China’s economic growth slowed significantly within the third quarter of this year.
Data has shown that the slow growth of the country’s economy was caused by power shortages and wobbles in the property sector. Aside from this, there are also concerns about elevated inflation due to a relentless surge in oil prices.
“There are some weak data out of China, which is concerning on a global basis, and then market participants came into this earnings with a very pessimistic view but banks dramatically exceeded expectations,” Great Hill Capital Llc’s Managing Member Thomas Hayes said.
“Now we are in the second week of earnings, which is more dependant on the general economy as a whole, so it is a ‘show me’ kind of market now.”
Because of the current state of the market, nine of the 11 major S&P 500 sectors traded lower. Meanwhile, energy stocks rose 1.1 per cent as Brent crude oil hit its highest since October 2018.
Investors at Wall Street will be keeping a close eye on how Corporate America mitigates the impact on earnings from supply chain disruptions, labour shortages and higher costs, especially amid rising oil prices.
However, forecast-beating results from big US lenders last week set a positive tone for the third-quarter earnings season. According to Refinitiv data, analysts are expecting S&P 500 earnings to show a 32 per cent rise from a year ago.
Growth stocks such as Google-parent Alphabet, Microsoft Corp, Amazon.com Inc, Tesla Inc and Advanced Micro Devices Inc rose in early trading with gains between 0.2 per cent and 2.0 per cent.
The stock market indices also showed a decrease in early trading:
Apple Inc fell 0.6 per cent ahead of its event where they are expected to unveil new Mac laptop computers with more powerful processor chips.
Walt Disney also slipped down to 2.6 per cent after Barclays downgraded the media giant’s stock to “equal weight” from “overweight”.
Unlike the others, Dynavax Technologies jumped 2.5 per cent after French biotech company Valneva SE reported positive results from its late-stage trial of its COVID-19 vaccine candidate VLA2001, using the company’s CpG 1018 adjuvant.
Johnson & Johnson, insurer Travelers, Netflix Inc, Verizon Communications, oilfield services cos Baker Hughes Co, Schlumberger NV, Tesla Inc and Intel Corp are some of the companies set to report quarterly results this week.
After a better than expected September retail sales report on Friday, the focus on this week will also be on data related to housing starts, building permits, existing home sales, the Philly Fed index and Markit flash PMIs.
Declining issues outnumbered advancers for a 2.04-to-1 ratio on the NYSE and for a 1.69-to-1 ratio on the Nasdaq.
The S&P index recorded 12 new 52-week highs and no new lows while the Nasdaq recorded 28 new highs and 39 new lows.
With AAP
Eliza Sayon is an experienced writer who specialises in corporate and government communications. She is the content producer for Public Spectrum, an online knowledge-based platform for and about the Australian public sector.
