(Bloomberg) — Stocks were on track for their first day of gains this week after a slew of positive earnings surprises in Europe and blowout results from Tesla Inc.
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Futures on the Nasdaq 100 climbed 0.8% after Tesla posted its biggest quarterly profit in more than a year, sending the stock surging 11% in premarket trading. Europe’s Stoxx 600 rose 0.5%, supported by strong results from Barclays Plc, Unilever Plc and Hermes. US Treasuries climbed for the first day this week and the dollar fell.
The gains mark a resumption of the rally that took the S&P 500 to its 47th record high last week. Traders are bracing for more results from US tech giants, a turbulent US presidential race and the Federal Reserve’s next rate decision.
With Alphabet Inc., Amazon.com Inc. and Meta Platforms Inc. reporting next week “I would be hesitant to say we are through this earnings season,” said Colin Graham, head of multi-asset strategies at Robeco. “Earnings expectations have been downgraded more this quarter than in previous quarters and the bar to beat them was really low this time.”
In Europe, government bonds climbed on rate-cut expectations as data showed a downtrend in private-sector activity extended into a second month. The purchasing managers’ numbers did little to ease fears that the region’s economy is slipping back into stagnation and the probability of a half-point rate reduction by the European Central Bank in December is now a coin toss.
Euro-Zone Private-Sector Economy Fails to Grow for Second Month
UK gilts stood out, diverging from gains in their peers. Investors unloaded the debt on fears of a flood of new issuance amid reports UK Chancellor Rachel Reeves is looking to significantly increase her ability to borrow in next week’s budget.
In commodities, oil prices rebounded as traders continued to await a retaliatory Israeli strike on Iran.
Corporate Highlights
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Barclays Plc posted a surprise increase in fixed-income trading while its stock traders generated £692 million in revenue in the period, topping the £688 million average of analyst estimates compiled by Bloomberg.
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Unilever Plc’s revenue increased 4.5% in the third quarter, beating the 4.3% expected by analysts, the soap-to-stock cube conglomerate said Thursday.
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Abrdn Plc shares plunged the most in 14 months after clients pulled money from its equities funds last quarter, leading to outflows that underscored the challenging task the firm’s new chief executive officer is facing.
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Hermes sales rose as the Birkin bag maker met resilient demand for its pricey handbags, bucking the broader luxury market slump.
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Renault SA confirmed its full-year guidance as the French automaker expects to benefit from new models including the R5 electric car and updated Dacia sport utility vehicles.
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Boeing Co. factory workers rejected a new labor contract that would have increased their wages by 35% over four years, dealing a blow to the embattled aircraft manufacturer as it tries to overcome a crippling work stoppage.
