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U.S. stocks rise ahead of a wave of corporate earnings reports, economic data

AuthorPeter Nurse
Published 10/15/2023, 09:14 PM
Updated 10/16/2023, 10:44 AM
© Reuters.

Investing.com -- U.S. stocks rose Monday as investors prepared for a big wave of corporate earnings this week and an upcoming speech by Federal Reserve Chair Jerome Powell. 

At 10:42 ET (14:42 GMT), the Dow Jones Industrial Average rose 335 points or 1%, while the S&P 500 was up 1.1% and the NASDAQ Composite was up 1.2%.

The main indices on Wall Street ended in a mixed fashion last week, with the 30-stock Dow gaining 0.2%, while the benchmark S&P lost 0.2% and the tech-heavy Nasdaq dropped 0.6%.

Tension over Middle East escalation

Trading on Wall Street could be choppy as investors fret about escalating violence in the Middle East.

Secretary of State Antony Blinken returned to Israel as part of a concerted diplomatic attempt to ensure Israel's conflict with Palestinian militant group Hamas does not spillover elsewhere in the region as Israel prepares for a ground invasion of the Gaza region.

Iran, which backs Hamas, the dominant power in Gaza, has warned Israel of escalation if it kept attacking Palestinians.

Quarterly earnings season ramps up

The market received a boost on Friday after a slew of reports from major financial firms, including JPMorgan Chase (NYSE:JPM) and Wells Fargo (NYSE:WFC), were generally well received.

This week sees the earnings season ramp up, with 11% of the S&P 500 slated to report, although Monday is a little short of major names, with Charles Schwab (NYSE:SCHW) the main report. Schwab beat expectations on profit as revenue dipped 16% from the year before. Shares rose 6%.

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Continuing the banking theme, Bank of America (NYSE:BAC) and Goldman Sachs (NYSE:GS) are both due ahead of the open on Tuesday.

Other big names include healthcare giant Johnson & Johnson (NYSE:JNJ), reporting ahead of Tuesday’s market open, consumer products giant Procter & Gamble (NYSE:PG) ahead of Wednesday’s open, Netflix (NASDAQ:NFLX) and Tesla (NASDAQ:TSLA) after Wednesday’s close and Philip Morris (NYSE:PM) ahead of the open on Thursday.

Rite Aid (NYSE:RAD) will also be in the spotlight after the drugstore chain filed for Chapter 11 bankruptcy on Sunday. Trading was halted early Monday.

September retail sales due on Tuesday

In economic data, retail sales for September, due on Tuesday, will give investors insight into the strength of consumer spending.

There are also a number of Fed officials due to speak this week, but most attention will be on comments by Fed Chair Jerome Powell on Thursday when he addresses the Economic Club of New York, just before the start of the central bank's blackout period.

Crude consolidates after strong gains

Oil prices consolidated Monday after the previous week’s hefty gains, with all eyes on the tensions in the Middle East.

Israel is not a big player in terms of crude production, but concerns are mounting about any potential escalation which could impact supplies from countries in the world's top oil producing region, including Saudi Arabia, Iran and the United Arab Emirates.

(Oliver Gray contributed to this item.)

 

Latest comments

Bond yields are up almost 10 basis points and stocks are up over 1%? Financial media states that equity “investors” are discounting the rise in rates and are focusing on earnings. But earnings are in the past, are expected to be down YoY, and companies have to currently deal with rising rates, so I’m not sure why stocks are not only rising, but rocketing higher? Makes no sense! But hey! Its October and seasonality says it’s a good time to invest in stocks. Just remember, October is also the month of some of the most major drawdowns in history!
Today's knee jerk was the Payday effect, everyone who gets paid on the 15th got their checks deposited with 401k match. Tomorrow fundamentals matter again: inflation is still a clear and present danger; the middle East is a mess; and both parties wish the current POTUS to be impeached. This all spells trouble for the markets.  The fact bank stocks are beating earnings predictions should come as no surprise: they do the same amount of work for more interest payments now. However, for the rest of us, high interest rates and high inflation are a two punch knockout combo
based on your logic everyone should buy stonks on the 14 and earn guaranteed 1pcnt because of 401k? nah, not that simple, guy
 Not my logic... Stock Traders Almanac and Quantpedia. It's called Payday Effect and its fairly well documented along with Turn of the Month which is even stronger. No trading pattern is 100% accurate. Use position sizing to manage risk
 Talking news heads will interpret the news based on market price action.  They will not, however, predict market price action based on the news.  Sometimes their correlations are correct but most times there are other events driving the markets the news heads are oblivious to.  It is unwise to buy before earnings, makes more sense to buy after goodnews. Post Earnings Announcement Drift (PEAD) is fairly well documented in Quantpedia also. Which is why I surmise today's action is simply Payday Effect and nothing more
Missed spelled “currupt” earnings report
"Thanks to inflation, our revenue hit all time highs! Profits are down and we have had to lay off half the staff, but so much revenue!"
"Lin.kedIn lays off over 500 workers as hiring activity slows"...wait, I thought we were told that Biden's economy was so great and there are so many new jobs and hiring! Reality is they are just converting full time positions to part time to save on benefit costs and expanding government jobs that do not increase GDP.
Also, Rite Aid just declared bankruptcy.
yes there is alot of jobs out there,and the economy is still running warm. soft landing is coming.
There is no such thing as a soft landing when FED raises rates so aggressively. It should be obvious that the FED is looking to break something before they even think of lowering interest rates. This will not end well for those who insist on fighting the FED.
"LinkedIn lays off over 500 workers as hiring activity slows - source"...wait, I thought we were told that Biden's economy was so great and there are so many new jobs and hiring! Even LinkedIn is downsizing. Reality is they are just converting full time positions to part time to save on benefit costs and expanding government jobs that do not increase GDP.
srsly theres gotta be another reason than 'earnings season'. Is it the us venezuela agreement - easing fears of oil driven inflaton? or is there something positive going on in israel?
algos manipulating the market, nothing else
fun fact - 75% of all volume is algos
So nobody was aware of earnings on Friday and so they dumped because of all the bad economic and geopolitical news but then on Monday morning they woke up and realized earnings were coming up and decided to buy in preparation?
The market is the market. If you don‘t accept it, just stay away.
You missed the point, Tom. This article is nonsense.
Of course, savvy "investors" always "buy" when they're waiting for something.  Par for the course in the criminally manipulated US Ponzi Scheme.
Biggest investment joke in the world
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