Stocks supported by strong earnings from Procter & Gamble, Comcast, and United Technologies

Strong US earnings are making investors focus on the strong US economy and are tentatively driving equities higher across the board.  Overnight the global equity rebound stalled as markets were focused on the uncertainty with US-China trade talks.  Yesterday’s Financial Times report that the Trump administration scrapped this week’s preparatory trade talks with two Chinese vice-ministers sent a brief shockwave of panic into stocks and pushed safe-haven assets higher.  White House Adviser Larry Kudlow quickly refuted the report and we saw that help recover some of the losses, but the damage was done as skepticism will likely grow as we near the next key meeting which will take place at the end of the month with Vice Premier Liu He.  We have seen a hunky-dory period of calm with trade talks, but that could end as the US will likely a hardline on forced technology transfers and structural reforms.  US stocks will continue to take their queue from a busy earning season reporting day.

This morning we saw strong top and bottom line beats from three big earning reports.

Procter & Gamble earnings beat was also accompanied with a slight raise to their organic revenue guidance, possibly a good sign for the US consumer.

The US cable giant also delivered strong results and lost less TV customers than expected, not necessarily a sign US consumers are cutting expenses, but perhaps Netflix and Amazon Prime are taking away market share.  Comcast did deliver 351,000 new customers, a slight miss of the 358,000 analysts eyed, but roughly flat year over year.

United Technologies saw robust corporate earnings and was very optimistic with their aerospace projects.  The initial guidance was in-line with analysts expectations.

The Dow Jones Industrial Average and S&P 500 future are poised to open over half a percentage point higher.  The risk on mode is also driving the Japanese yen lower against all of its major trading partners.  Gold is also down 0.4% and approaching the lows for the week.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Ed Moya

Ed Moya

Senior Market Analyst at OANDA
With more than 20 years’ trading experience, Ed Moya is a market analyst with OANDA, producing up-to-the-minute fundamental analysis of geo-political events and monetary policies in the US, Europe, the Middle East and North Africa. Over the course of his career, he has worked with some of the world’s leading forex brokerages and research departments including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including BNN, CNBC, Fox Business, and Bloomberg. He is often quoted in leading print and online publications such as the Wall Street Journal and the Washington Post. He holds a BA in Economics from Rutgers University. Follow Ed on Twitter @edjmoya ‏
Ed Moya