US markets
US equities closed higher on Tuesday, buoyed by a slew of upbeat earnings and forecasts that boosted investor confidence in the health of US companies. The bellwether S&P 500 rose 0.7 percent, the blue-chip Dow Jones Industrial Average added 0.6 percent, and the tech-heavy NASDAQ gained 0.9 percent.
Nearly all S&P sectors ended in positive territory, led by gains among utilities, communication services, and real estate. The energy sector was the only decliner, pressured by weaker oil prices as risk factors eased alongside diplomatic efforts to contain the Middle East conflict. Rate-sensitive mega-cap growth stocks provided the biggest boost as benchmark Treasury yields held steady, easing off their recent surge. Third-quarter earnings season started gathering speed, with notable companies posting strong results. Verizon Communications rallied 9.3 percent after lifting its annual free cash flow forecast. Industrial conglomerate General Electric rose 6.5 percent after raising its annual profit guidance. Coca-Cola jumped 2.9 percent on a better annual sales outlook. Technology and manufacturing company 3M climbed 5.3 percent on its upbeat quarterly report, while aerospace company RTX, known as Raytheon, surged 7.2 percent after beating market expectations with its results.
In addition to positive earnings, S&P Global’s preliminary purchasing managers’ indexes (PMIs) showed that business activity in the US accelerated in October. The manufacturing sector ended five months of contraction as demand conditions improved for the first time since April, while the expansion of the service sector picked up the pace.
These price data reflect observations at market close: WTI spot crude oil dropped by US$1.85 to US$84.39 while spot gold fell by US$15.70 to US$1,961.75. The US dollar was mixed vs. major currencies. The US Treasury 30-year bond yield fell by 3 basis points to 4.96 percent while the 10-year note yield remained little changed at 4.84 percent.
European markets
European equities ended higher on Tuesday. While PMI data indicated economic challenges, the market remained resilient amid a spate of solid corporate results. The Europe-wide STOXX rose 0.4 percent, supported by gains in the German DAX, which firmed 0.5 percent, the French CAC, which gained 0.6 percent, and the UK FTSE 100, which inched up 0.2 percent.
Most sectors participated in the rally, with utilities, real estate, materials, and information technology leading the gains. However, financials and industrials edged lower. Mining stocks outperformed as metal prices ticked higher following reports of additional stimulus from China. Rio Tinto and Antofagasta saw significant jumps of 3.5 percent and 2.4 percent, respectively. Conversely, financials were a drag on the market, with Barclays sliding 6.5 percent after posting a slight drop in its third-quarter profit compared to a year ago. The lender also warned that competition for savers’ money was hurting its margins. Among individual stocks, luxury giant Hermes International rose 2.8 percent as its third-quarter sales topped estimates, defying a slowdown in the broader luxury industry. Sportswear maker Puma also saw a significant rise of 7.6 percent after reporting a stronger-than-expected profit margin for the third quarter and maintaining its full-year outlook.
On the economic data front, preliminary PMIs showed business activity in the eurozone remained in deep contractionary territory in October, suggesting a looming economic recession despite limited concerns over further rate hikes. Additionally, consumer sentiment in Germany is expected to fall for a third consecutive month in November, as inflationary pressures continue to squeeze households’ purchasing power.
Asia Pacific markets
Most Asian markets regained their ground on Tuesday.
Mainland China’s equities rebounded after four consecutive sessions of losses. China’s CSI 300 index added 0.4 percent, and the Shanghai index gained 0.8 percent. Sentiment improved after state fund Central Huijin bought exchange-traded funds and said it will continue to increase holdings. Textile stocks rallied after a narrower decline in September’s textile and apparel exports ignited hopes of a recovery. Education stocks advanced following the opening of the China Educational Equipment Exhibition in Tianjin. E-commerce shares rose as the State Council approved the establishing of a pilot zone for Silk Road e-commerce cooperation in Shanghai. However, Hong Kong equities continued their losing streak for a fourth straight session amid lingering concerns over China’s economic outlook and the weakness in China’s real estate sector. The Hang Seng index slid 1.1 percent.
Japanese stocks snapped a three-session losing streak with modest gains. The Nikkei index edged up 0.2 percent, and the broader TOPIX firmed 0.1 percent. Investors bought up beaten-down technology shares following a selloff, triggered by earnings results of electric motor maker Nidec, 10.5 percent. Air transportation stocks gained as oil prices eased. ANA Holdings rose 1.4 percent, and Japan Airlines jumped 1.7 percent.
Taiwan’s TAIEX added 0.4 percent. South Korea’s KOSPI jumped 1.1 percent. Indian markets were closed for a holiday.
Australian shares bounced back after three consecutive sessions of declines. The All Ordinaries index inched up 0.2 percent. Mining stocks gained amid firmer commodity prices, with major miners BHP Group and Rio Tinto rising 0.5 percent and 1.6 percent, respectively. Technology and financial stocks also advanced, while gold and healthcare stocks dropped. In corporate headlines, Ampol jumped 1.1 percent after the fuel refiner and retailer reported a surge in third-quarter earnings. Investors shifted their focus to September’s inflation data due on Wednesday for more insights into the interest rate outlook.