Daily Market Color October 16, 2018Equities Bounce Back After Strong Earnings Corporate Earnings Support Stocks US equity markets were able to bounce back during today’s trading session as investors received a batch of strong quarterly earnings reports. The tech-heavy Nasdaq posted the largest gain among major indices (+2.89%), while the DJIA experienced its largest one-day rally since March, adding 548 points (+2.25%). Highlights of the corporate earnings releases included- Morgan Stanley (+5.68%): strong investment banking results ($1.5 billion in revenues vs. $1.3 billion estimate) Goldman Sachs (+3.01%): better than expected figures in most divisions (trading represented one of the few disappointments) Johnson and Johnson (+1.95%): robust results in the pharmaceuticals (cancer drug sales) and consumer business (baby care products) segments UnitedHealth (+4.73%): earnings rose 28%, driven by strength in the insurance business Trump Continues Fed Criticism Today President Trump reiterated his stance against the Fed’s recent and anticipated monetary policy decisions in an interview with Fox Business Network. “It’s independent so I don’t speak to him, but I’m not happy with what he’s doing, because it’s going too fast,” Trump answered when asked about Fed Chair Jerome Powell, whom he fully endorsed last year. Trump once again cited low inflationary pressures in his defense to maintain rates at their current levels, while describing the FOMC as his “biggest threat”. US Treasurys experienced a mild selloff during today’s trading session, as yields/swap rates climbed 1-2 bps across the curve.
