US stocks surge after Goldman’s earnings better than expected
US stocks rallied on Tuesday, extending their gains from the previous session, after Goldman Sachs became the latest company to post better-than-expected quarterly results.
The S&P 500 index rose 2.2% and the tech-heavy Nasdaq Composite gained 2.6% after the opening bell in New York. Stoxx 600 regions of Europe rose 1.2%. Hong Kong’s Hang Seng closed up 1.8 percent.
That gain in the stock market followed a rally on Monday, with the S&P closing 2.6% higher – helped by better-than-expected third-quarter results from Bank of America. BofA attributes its income to “resilient” US consumers.
Investors are watching the latest corporate financial reports for signs of stress from high inflation and rising borrowing costs.
The Federal Reserve has made accusations this year of aggressive monetary policy tightening to limit the rapid pace of price increases – raising interest rates by a huge 0.75 percentage points in the last three meetings. This is up to the target range of 3 to 3.25%. Concerns have grown in recent months that the Fed and its colleagues will turn policy screws into a protracted deceleration.
But the early stages of the new US corporate earnings season helped brighten sentiment. Goldman shares rose more than 4% on Tuesday, after the bank third quarter net income report was $3.1 billion, down from $5.4 billion a year earlier but above analyst estimates of $2.9 billion.
The strong start to the week for equity markets was also boosted by the UK government’s decision on Monday to scrap most of last month’s “small” Budget measures, which had sent markets into disarray. panic and spark a sale of retirement fund assets.
Jim Reid writes: “The UK news appears to have hit global markets hard over the past 24 hours after the government officially announced one of the biggest overthrows in political history and get rid of most of the money left in their small budget. , a strategist at Deutsche Bank.
Some analysts and investors continue to view the recent stock market rally as temporary. The FTSE index of global shares has fallen 25% this year, ending its longest streak of quarterly losses since 2008 last month.
Kasper Elmgreen, head of securities at Amundi, said: “Sentiment has been really down, referring to a BoA survey released on Tuesday that found 72 per cent of fund managers. predict the economy will be weaker in a year.
Westminster rejected its financial proposals, and BofA’s results were positive for markets on Monday. But Elmgreen said: “We don’t see a lot of things that bring us innovation, [long-term] trust. It’s natural for us to have optimism and strong days in a truly challenging macro perspective. ”
“We’re entering a quarter of the calculation: this could be the quarter where earnings have to be,” he added.
In the government debt market, the yield on the UK 10-year gold bond was steady at 3.98%, following a strong rally in the previous session. Yields on the longer 30-year forward fell 0.03 percentage points to 4.34% as its price rose.
The pound rose 0.3% against the dollar to $1,132. Elsewhere, the yen traded at around 149 yen against the greenback, hitting a 32-year low.