The stock market has risen in response to a positive start to US earnings.
Investors tracked global inflationary pressures as Asian and European markets surged Thursday, lifted by a strong start to the US earnings season ahead of more big-name reports.
Oil prices rose near multi-year highs as the International Energy Agency raised global demand predictions, citing natural gas and coal constraints as reasons for the shift to crude.
“A range of institutions, including Wells Fargo, Morgan Stanley, Citigroup, and Bank of America, are expected to release results today,” said XTB analyst Walid Koudmani.
“These results might set the tone for what to expect in the next weeks of earnings season, as well as provide insight into how institutions have performed recently, as growing expenses and market instability spooked investors.”
Traders followed Wall Street’s lead after JP Morgan Chase’s third-quarter earnings exceeded expectations.
Despite warnings about the impact of rising fuel prices, Delta Air Lines had a successful third quarter, while BlackRock had better-than-expected results.
Markets.com analyst Neil Wilson added, “Earnings season allows investors a chance to overlook some of the noise and market storylines and delve into genuine statistics.”
“We only expect the corporate reporting season to highlight the inflation narrative this time.”
Meanwhile, traders are preparing for the end of an age of cheap money, as inflation continues to rise as a result of supply chain issues and growing demand.
Concerns over continually high price rises are prompting authorities to tighten their belts after a year and a half of ultra-loose monetary policies from the world’s central banks, which helped stimulate a recovery from the economic crisis and send shares surging.
Several have already begun, like South Korea and New Zealand, with Singapore joining on Thursday, but all eyes are on the Federal Reserve, which aims to move next month or in December, according to minutes from its most recent meeting.
A stronger-than-expected figure on US consumer inflation bolstered the case for the Fed to begin reducing its mammoth bond-buying program in November, but the biggest question on traders’ minds today is when it will start raising interest rates.
“Wednesday’s still-high consumer price index marks approximately six months’ worth of hot inflation data — showing that inflation isn’t as ephemeral as many investors previously assumed,” Quadratic Capital Management’s Nancy Davis said.
“Supply-chain disruptions and a rapid rise in costs due to the labor shortage are driving the overall inflation story.”
China announced on Thursday that factory-gate inflation reached a new high in September. The Washington Newsday Brief News is a daily newspaper published in Washington, D.C.