Hello traders, welcome to Thursday, the final trading day of October. Today brings a lot of activity across the markets as earnings season continues in full swing. We’ve had major earnings releases, with some mixed market reactions, especially from technology giants.
Yesterday, Microsoft and Meta Platforms both beat earnings expectations. However, traders seemed less optimistic about their future outlooks, with after-hours trading showing a 4% drop for Microsoft and a 3% drop for Meta. Eli Lilly also released earnings, which came in below expectations, leading to a 6% drop in the stock during Wednesday's session. Looking ahead, today's earnings calendar is just as packed, with Apple and Amazon set to report after the market close. Before the open, we’ll see updates from MasterCard, Merck, Shell, and Uber, all significant players likely to influence market sentiment.
On the macroeconomic front, yesterday brought several key data points. We saw inflation figures from Germany and Spain, both of which came in above expectations, pointing to persistent inflationary pressures in Europe. The ADP Non-Farm Employment Change from the US was notably strong, with 233,000 jobs added—more than double expectations. However, US GDP missed the mark, coming in at 2.8% rather than the anticipated 3%.
Today’s macro calendar is also busy, starting with China’s manufacturing PMI coming in above 50, a sign of expansion, while Australia’s retail sales disappointed at a mere 0.1% increase. Japan kept its interest rates unchanged, aligning with expectations. Later today, we’ll be watching the Eurozone’s CPI flash estimate, expected at 1.9%, as well as GDP from Canada (expected at 0%) and the core PCE Price Index and Employment Cost Index from the US. These reports are likely to shape market moves as the session unfolds.
On the indices front, we’re seeing a pronounced correction in European markets. The FTSE has hit its lowest point since August, while the DAX and CAC have also taken sharp dips. US indices are holding up better, but even they experienced a challenging session yesterday, which could signal the start of a broader bearish correction.
On the currency market, safe-haven currencies are leading the charge, with the Japanese Yen and Swiss Franc showing strength amid the market volatility. In commodities, oil is attempting a reversal after reaching recent lows two days ago, while metals are still close to their long-term highs. Gold remains near these highs, and while silver experienced a bearish correction yesterday, overall sentiment in metals remains positive.
With significant data on both the earnings and macroeconomic calendars, expect a volatile session ahead as markets react to these major updates.