In This Article:
A look at the day ahead in U.S. and global markets from Mike Dolan
Another eye-catching bounceback in U.S. stocks on Monday was just about sustained overnight ahead of another slew of big bank earnings and as President Joe Biden's planned visit to Israel tempered anxiety about a wider escalation of the Gaza war.
Even with a packed diary of third-quarter earnings, economic updates and policymaker speeches ahead this week, day-to-day sentiment still appears to be dominated by the ebb and flow of concern about the tense Middle East conflict.
Biden leaves later on Tuesday for a high stakes visit to Israel and Jordan and Washington said Israeli Prime Minister Benjamin Netanyahu had agreed to let humanitarian aid reach besieged Gazans.
That reversed a pre-weekend 'safety bid' that emerged amid fears an Israeli ground invasion into Gaza could draw other regional countries and groups into the war. It appeared to put the situation on hold for a day at least.
The 1%-plus rally in the S&P 500, which was the best start to the week since February, was matched by a retreat in crude oil, gold and Treasury bond prices and the dollar.
Global stocks in Asia and Europe aped at least some of that bounce overnight, but Wall St futures ticked back a touch ahead of Tuesday's opening bell. U.S. crude held steady and Treasury yields crept higher.
But after impressive Q3 readouts from JPMorgan, Wells Fargo and Citigroup on Friday, markets are braced on Tuesday for updates from Bank of America, Goldman Sachs and Bank of New York Mellon.
Reflecting the optimism around how banks and financials are benefitting from a higher interest rate world and rising asset management growth, Charles Schwab shares also jumped 4.7% on Monday as the brokerage posted a smaller-than-expected drop in quarterly profit.
Third-quarter earnings for S&P 500 companies are estimated to have increased 2.2% year-over-year, up from an estimated increase of 1.3% a week earlier, according to LSEG data.
But a welter of economic numbers will barrel into the mix today too - chief among them the September retail sales release, but also industrial output data and an October reading on U.S. housing. Canada's latest consumer price data will be also be closely eyed.
And a full schedule of Federal Reserve speakers tees up Fed boss Jerome Powell's public appearance on Thursday.
Before then, bond markets will have to negotiate tomorrow's 20-year Treasury auction.
The relatively new 20-year tenor has often proved unpopular and will be watched closely after a poor reception for the latest 30-year bond last week. But with yields back above 5% and close to record highs of 5.25% set earlier this month, it will be an interesting test of investor appetite to grab these elevated long-term coupons.