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WATCH THOSE EARNINGS COMING! (0631 GMT)
A wild week for global earnings kicks off today seemingly in
a cautious fashion as profit revisions slow down while inflation
and supply chain pressures risk squeezing margins in a season
that could set the direction of travel in the weeks ahead.
The overall picture looks still strong though as the economy
remains in recovery mode, offsetting for now angst over central
banks tapering bond purchases and raising interest rates.
The S&P 500 is just below its record peak and Q3
beats are now close to 14%, while STOXX 600 beats in
Europe are past 60% so far, per Refinitiv I/B/E/S data.
But the wariness is justifiable, especially with Big Tech
results packing the calendar this week just as investors fall
out of love with pandemic darlings, lured by the attractions of
cheaply valued stocks.
Eyes are on Facebook, which starts the season for the
FAANG group today following a 26% drop in Snap shares
on Friday after the ad firm warned of a hit from Apple privacy
tweaks.
Meanwhile, a long unloved sector, banks, is finding fresh
demand from the changing macro environment. HSBC
surprised with a 74% rise in profit as concerns about
pandemic-related bad loan receded, allowing it to announce a $2
billion buyback. Its shares rose to a 4-month high in Hong Kong.
Futures on main European and U.S. benchmark indexes were
trading just a tad in the black, while crude oil prices
continued their race to new multi-year peaks and U.S. 10-year
treasury yields held a five-month high of 1.7% hit last week.
Key developments that should provide more direction to
markets on Monday:
* HSBC surprises with 74% rise in Q3 profit and $2 bln
buyback
* Italy, UniCredit fail to clinch Monte dei Paschi rescue
deal
* Exor in new talks with Covea over scrapped $9bn sale of
PartnerRE - report
* Kazakhstan central bank meets
* German Ifo October
* U.S. building permits
* U.S. earnings: Kimberley Clark, Facebook, Logitech,
Packaging
Corp of America
(Danilo Masoni)
*****
EUROPE EDGES UP (0626 GMT)
European shares look set to start the week just up slightly
following small gains in Asia overnight, as the reporting season
takes centre stage with results from regional heavyweights and
big U.S. tech stocks due in the coming days.
At the time of writing futures on the Euro STOXX 50, DAX and
FTSE 100 inidces were trading between flat and a rise of 0.2%,
while U.S. stock index futures were also moving slightly above
parity.
(Danilo Masoni)
*****
