OPENING CALL
Stock futures and bond yields rose on Monday, continuing their recent rally on signs the U.S. economy is still expanding.
The broader mood in markets was to add risky assets like stocks and rotate out of safer assets like gold and Treasurys following Israel's limited attack on Iran over the weekend.
While escalation is still possible, the attack was small enough, and avoided key energy and nuclear facilities, so as not to immediately trigger retaliation.
Beyond rising tensions in the Middle East, investors will be focused on a full week of earnings reports, Friday's jobs report for October, and politics, with the election a little more than one week away.
Earnings are expected this week from tech giants Alphabet, Microsoft, Meta Platforms, Apple, and Amazon.com.
Other major corporates releasing figures include Visa, Advanced Micro Devices, McDonald's, Pfizer, Eli Lilly, AbbVie, Caterpillar, Starbuck s, SoFi Technologies, PayPal, Mastercard, Merck, Uber, Comcast, Bristol Myers Squibb, Exxon Mobil, and Chevron.
Premarket Movers
Diamondback Energy was down 2.4%, APA declined 2.4%, Exxon Mobil fell 1.7%, and Chevron was down 1.4% as oil prices retreated following weekend airstrikes by Israel against Iran that steered clear of oil or nuclear facilities.
Ford was rising 0.8% ahead of the auto maker's third-quarter earnings scheduled for after the closing bell.
McDonald's was up 1% after the fast-food giant said testing ruled out beef as the source of the outbreak of E. coli linked to the company's Quarter Pounders.
Nvidia was up 1.2%, extending gains from Friday when the chip maker tested all-time highs and its valuation neared $3.5 trillion.
U.S.-listed shares of Philips were down 16% after the health-technology company cut its sales outlook for 2024 to "reflect deteriorated demand in China."
Postmarket Movers
Hawaiian Electric Industries disclosed that Ken Griffin's hedge-fund firm Citadel, and related funds, purchased a stake in the company. Shares rose 4.8%.
MEI Pharma inked a deal valued at up to $62 million with Aardvark Therapeutics, entering an asset purchase agreement in which MEI sold its rights, title and interest in and to certain assets related to the company's novel drug candidate for the treatment of solid tumors. MEI Pharma shares rose 28%.
Market Insight
The continued strength in artificial intelligence could further boost chip demand in 2025, Daiwa said, with the rollout of mobiles and PCs powered by AI likely further supporting the momentum.
Daiwa expects the global AI high-performance computing market to more than double its revenue to $120 billion this year and exceed $200 billion in 2026.
Daiwa doesn'tthink monetization trajectory is an issue, as it sees spending a "necessity in establishing the ecosystem."
Watch For:
Texas Manufacturing Outlook Survey for October; earnings from Ford, ON Semiconductor
Today's Headlines/Must Reads:
-At Boeing and Starbucks, Different Problems but Similar CEO Messages
-Why Apple's AI Success Hinges on the iPhone
-Economists Warn of New Inflation Hazards After Election
-At a Pivotal Moment, U.S. Economic Data Will Be a Mess
MARKET WRAPS
Forex:
The dollar rose to its highest in three months against a basket of currencies and the trend looks likely to continue, ING said, as evidence of U.S. economic strength and the possibility of victory for Donald Trump in the election boost the currency.
U.S. economic data this week, including jobs and PCE inflation figures, are unlikely to change expectations for smaller Fed interest-rate cuts, ING said.
The dollar "has come a long way very quickly this month" but it looks unlikely to reverse those gains yet.
Energy:
Oil fell more than 4% in reaction to the limited Israeli strikes over the weekend.
"Israel's response appears to have been measured with only Iranian air defense and missile production facilities targeted," ING said.
"The more targeted response leaves the door open for de-escalation and clearly the price action in oil...suggests the market is of the same view."
Metals:
Gold futures slipped following Israel's retaliation against Iran.
At first glance the retaliation seems relatively limited, and tensions could begin to subside in the short term, Pepperstone said.
This could damp safe-haven demand for gold bullion.
Gold may see a "small pullback" before climbing to a new record high, FOREX.com and City Index said, citing technical charts.
TODAY'S TOP HEADLINES
The SpaceX Advantage That Rivals Are Trying to Emulate
SpaceX catching its huge Starship booster shortly after liftoff was a major achievement. It was also a shot across the bow for competitors.
Developing reusable boosters for its Falcon vehicles has been key to SpaceX's efforts to cut the cost of space flight. Advancing the technology with Starship-the bigger and more powerful rocket it is developing-could extend the Elon Musk-led company's cost advantage versus rivals, especially in launches to low-Earth orbit, where SpaceX and others operate satellites.
Douglas Elliman Board Pushed for CEO Howard Lorber's Exit Amid Culture Concerns
Howard Lorber, chief executive of Douglas Elliman, was pushed by directors to resign after an investigation raised concerns on the board about a sexually charged work culture, according to people familiar with the situation.
Lorber, who has led the firm for two decades, stepped aside on Monday as chairman and CEO of one of the country's biggest brokerages. In a press release, the company said he had decided to retire. The 76-year-old executive didn't respond to requests for comment.
Coffee Price War Burns Keurig and Starbucks
Americans are pinching pennies on coffee.
Some are cutting back on trips to Starbucks. Others are hunting for sales at the grocery store-or filling reusable K-Cups with their own ground coffee to save.
Stocks Look to Extend Record Run Ahead of Tech Earnings, Election
The confluence of risks facing the stock market in coming days is enough to give some investors jitters.
This week brings earnings reports from many of the big tech companies whose stocks have powered the market to records. Analysts will scrutinize the companies' investments in artificial intelligence as they try to forecast the payoff from bets on AI.
What Is Behind the Rise in Bond Yields? Look to Powell, Not Trump.
Bond yields have risen sharply in recent weeks, and the popular narrative is that the market is casting its ballot for Donald Trump.
But the bond market's action reflects a presidential campaign from years past. "It's the economy, stupid," as James Carville, manager of Bill Clinton's 1992 presidential campaign, famously said.
U.S. Panel to Probe Cyber Failures in Massive Chinese Hack of Telecoms
WASHINGTON-A U.S. government panel plans to investigate how Chinese hackers breached several U.S. telecommunications networks, seeking to spy on prominent Americans, including former President Donald Trump and associates of Vice President Kamala Harris's campaign, according to people familiar with the matter.
The probe by the Cyber Safety Review Board will examine the lapses that allowed the hackers, who are believed to be working for a Chinese intelligence agency, to orchestrate a series of intrusions that some Biden administration officials fear amount to a major espionage coup against the U.S.
America Is Having a Panic Attack Over the Election
CLARKSTON, Ga.-The sun was shining. Bruce Springsteen was strumming an acoustic guitar. Yet beneath the peaceful surface, the stadium packed with thousands of Democrats practically thrummed with anxiety.
"I'm honestly legit kind of terrified," said Rebekah Williams, a 46-year-old Atlanta resident wearing a T-shirt that read "pro science, pro choice, pro wrestling." The thought of trying to get through the next couple of weeks until the election had her on edge, not to mention what might happen afterward. To get through it, she was counting on "a lot of marijuana."
Write to paul.larkins@wsj.com TODAY IN CANADA
Earnings:
Nothing makor scheduled
Economic Calendar:
Nothing makor scheduled
Stocks to Watch:
Canfor 3Q Loss/Shr C$2.96; 3Q Loss C$350.1M; 3Q Sales C$1.2B; Notes 'Persistent Pressure' on North American Lumber Markets and Pricing and Positive Results From Alberta; Records C$100.3M Asset Write-Down and Impairment Charge Related to Closure of Plateau and Fort St. John Operations; Demand in North American Lumber Market Is Anticipated to Remain Under Pressure for the Balance of 2024; Expects British Columbia Will Continue to Face Challenging Operating Conditions
Patriot Battery Metals Targets Updated Mineral Resource Statement March-April 2025; Shaakichiuwaanaan Feasibility Study on Track for 3Q 2025
Expected Major Events for Monday
00:01/UK: Sep Zoopla House Price Index
11:00/UK: Oct CBI Distributive Trades Survey
14:30/US: Oct Texas Manufacturing Outlook Survey
17:59/UK: Sep Adzuna UK Job Market Report
23:30/JPN: Sep Labour Force Survey
All times in GMT. Powered by Kantar Media and Dow Jones.
Expected Earnings for Monday
Acadia Realty Trust $(AKR)$ is expected to report $0.07 for 3Q.
Actinium Pharmaceuticals Inc $(ATNM)$ is expected to report $-0.34 for 3Q.
Aegis Brands Inc (AEG.T) is expected to report for 3Q.
Agilysys Inc $(AGYS)$ is expected to report $0.17 for 2Q.
Alliance Resource Partners LP (ARLP) is expected to report $0.82 for 3Q.
Bank of Hawaii Corp $(BOH)$ is expected to report $0.82 for 3Q.
Bank of Marin Bancorp $(BMRC)$ is expected to report $0.27 for 3Q.
Bar Harbor Bankshares (BHB) is expected to report $0.68 for 3Q.
Brown & Brown Inc $(BRO)$ is expected to report $0.75 for 3Q.
Cadence Design Systems Inc $(CDNS)$ is expected to report $0.89 for 3Q.
Calix Inc $(CALX)$ is expected to report $-0.14 for 3Q.
CenterPoint Energy Inc $(CNP)$ is expected to report $0.35 for 3Q.
(MORE TO FOLLOW) Dow Jones Newswires
October 28, 2024 05:56 ET (09:56 GMT)
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