Friday saw a little increase in US stock futures due to increases in tech stocks and Netflix’s impressive quarterly report. The Nasdaq, S&P 500, and Dow are expected to record their sixth straight week of gains.
Important Drivers:
- Technological Advancements: Apple, Nvidia, and other IT heavyweights all saw increases, and Netflix surged 6.5% after surpassing forecasts for membership growth.
- Earnings Beats: SLB, American Express, and other businesses posted impressive quarterly earnings.
Economic Data: Market optimism was bolstered by positive economic indicators such as retail sales and home starts.
Challenges:
Concerns about valuation: Since the S&P 500 is currently selling at 22 times forward earnings, stretched valuations could make stocks susceptible to a decline.
Interest Rates: Treasury yields gradually increased, which would put pressure on stocks.
A regulatory investigation into Tesla’s self-driving software was conducted.
Professional Opinions:
Because larger companies are fully valued and have high expectations for corporate achievements, Neuberger Berman portfolio managers prefer better small and medium-sized businesses.
Prospects for the Market:
Rate Cut Expectations: at the Fed meeting in November, there is a 92.1% chance of a 25 basis point rate cut.
– Expanding Market Performance: With rate cuts in progress, smaller businesses might do better.
Impact on the Global Market: Following the introduction of funding programs by China’s central bank to stimulate the equity market, Chinese companies listed in the US saw a sharp increase in value.
Prominent Movers:
Netflix (+6.5%)
– Apple (up 1.5%).
Nvidia (+0.9%)
– Tesla (-0.5%)
+2.4 percent for American Express
– Health CVS (-11.3%)
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