Daily Market Color

Financial Markets Mixed in Anticipation of Corporate Earnings


Earnings in Spotlight

This week equity investors will be getting a full slate of corporate quarterly earnings to evaluate, with 1/3 of the companies in the S&P 500 set to report this week, including tech giants Amazon and Google.  Earnings season thus far has been positive, with 82% of the firms who have reported beating expectations.  Major stock indices were mixed on the day, as the financial sector led the DJIA (-0.50%) and S&P 500 (-0.43%) lower, while the Nasdaq was able to muster a small gain of 0.26%.  US Treasurys continued to trade in a tight range this session, with the 10-year note yield finishing just below 3.20%. 



In commodity markets, crude oil futures ended flat as a barrel of WTI crude settled near $69.15.  The supply-curbing impact expected from the Iran sanctions (set to begin on November 4th) and the demand-curbing impact from the trade war with China largely offset each other in today’s tradng. Saudi energy minister Khalid al-Falih also announced the country’s willingness to raise output from the current level of 10.7 million bpd to 11 or even 12 million bpd.  Adding to the overall Middle East tension/uncertainty is the situation surrounding the killing of Saudi journalist Jamal Khashoggi. Recent comments out of Riyadh seem to link the journalist’s death to a fight with Saudi officials in the consulate.  A few White House officials and several members of Congress have recommended action against Saudi Arabia, although the Saudi government has already threatened to retaliate with “bigger measures” if that were to occur.         



More Tax Cuts?

At a rally in Nevada this past weekend President Trump surprised Americans (including those within his administration) when he announced that there would be a new middle-income tax cut.  The timing of the unexpected declaration comes just weeks before the midterm elections; although today Trump confirmed that a vote on the proposal would have to come after the election.  “We’re putting in a resolution sometime in the next week or week-and-a-half, two weeks,” Trump stated. “We’re giving a middle-income tax reduction of about 10 percent. We’re doing it now for middle-income people.” 


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