Trade-sensitive stocks rose across the board. Caterpillar, one of the best performers in the Dow, rose more than 5%, Caterpillar and 3M rose 4.65% and 3.8%, respectively. The news boosted chip stocks by 4.21% for Meguiar Technologies, 3.67% for Sales and 2.31% for Qualcomm.
Facebook is being abandoned by its allies. Following Paypals withdrawal from Libra last week, EBay, Visa and MasterCard announced within the day that they would no longer participate in the Facebook-sponsored Encrypted Currency Libra Association. At the beginning of its establishment, Libra Association was composed of 28 financial, e-commerce and digital money institutions. PayPal, Visa and MasterCard are among the core members, and they also support future payment systems. The withdrawal of these members has cast a shadow on Libras research and development. Facebook CEO Mark Zuckerberg will attend a congressional hearing on October 23.
The third quarter earnings season of U.S. stocks hit, and Credit Suisses earnings fell by 4.2% annually.
Alec young, managing director of global market research at FTSE Russell, said in an interpretation of todays market performance that, despite the positive reaction of investors to the progress of trade, it should be noted that the tariffs in force have not been lifted, and the profit prospects of us enterprises in 2020 remain unclear in the context of the continued weakness of the global economy.
In the coming week, the third quarter earnings of U.S. stocks will be unveiled. Bank stocks, including JPMorgan Chase, Citigroup and Goldman Sachs, will take the lead in delivering their report cards. Investors continue to pay attention to the impact of trade frictions on corporate earnings. Refinitiv, a research firm, expects earnings growth of S& P 500 stocks to fall by 3.1% annually over the past quarter, but does not rule out better-than-expected results. The agency had predicted that S&P 500 shares would record zero or negative growth in the second quarter, but real growth was 3% year-on-year.
Credit Suisses forecast is even more pessimistic, with earnings per share of S&P 500 shares expected to fall 5.9% year-on-year and overall earnings down 4.2% year-on-year. Falling oil prices are dragging down revenue and earnings in the energy sector, with two indicators expected to fall 32% and 9.5% respectively. Patrick Palfrey, a senior equity strategist at the bank, said earnings growth or regression was not the focus. He believed that companies would spend a lot of time talking about tariff increases in the coming earnings season to clarify the extent of the decline in earnings caused by trade uncertainty.
The Federal Reserves resumption of the expansion of its Treasury bill will buy $60 billion a month from next week.
On Friday, the Federal Reserve announced the resumption of its $60 billion monthly Treasury bond purchase program from October 15, the first expansion since 2014, and at least until the second quarter of next year. Fed officials said the move was to increase reserves, keep interest rates within target ranges and avoid previous turmoil in the money market, rather than quantitative easing. On the same day, the New York Federal Reserve announced that it would continue overnight repurchase operations until January 2020.
The Dawn of the Delivery Negotiations
On Friday, EU officials said there were positive signs in the talks with Britain. Banier, EUs chief negotiator for brexit, told 27 EU members that Britain had agreed that it would not be able to set up checkpoints at customs borders as an alternative to the security agreement. The news boosted the pound by more than 2% to 1.269 against the US dollar. Morgan Stanley estimates that the current probability of reaching a brexit agreement is 55%, higher than the previous estimate of 35%.
UBS believes the pound is expected to rise to a range of 1.25-1.29 against the US dollar if the UK delays brexit and 1.35 if a good deal is reached. However, it is by no means a safe pillow. Sources have revealed that they are cautious about the prospects for a breakthrough in the negotiations, as any breakthrough will require another compromise from the UK, and they are not sure whether it is possible.
European stocks closed higher. Britains FTSE 100 index closed at 7247.08, up 60.72 points or 0.84%, Germanys DAX index rose 2.86% to 12511.65, and Frances CAC 40 index closed at 5665.48, up 96.43 points, up 1.73%.
Iranian oil tanker was attacked and oil prices rose by more than 2%.
Influenced by the Iranian oil tanker attack, international oil prices rose. WTI crude oil futures rose 2.11% to $54.68 a barrel and Brent crude oil futures rose 2.37% to $60.50 a barrel. Crude oil analysts believe that there are at least two factors that inhibit the rapid rise of oil prices: first, the economic data released by the United States and the European Union slowed significantly in September, and the downward pressure on the global economy increased; second, at present, the possibility of a direct military conflict in the middle East is still small.
Trump: The first substantive phase of the US-China Economic and Trade Consultations
Trump said that the relationship between the United States and China has developed strongly. I respect China very much and respect President Xi Jinping very much. He is a great leader. I am glad to see that the first phase of the US-China economic and trade negotiations has yielded substantial results, which are of great benefit to both the United States, China and the world. It is hoped that the teams of the two sides will work hard to determine the text of the first phase agreement as soon as possible and continue to promote subsequent consultations. The United States welcomes Chinese students to study in the United States.
A New Round of High-level Economic and Trade Consultations between China and the United States concluded in Washington
From October 10 to 11, Liu He, a member of the Political Bureau of the CPC Central Committee, Vice Premier of the State Council and Chinese leader of the Sino-US Comprehensive Economic Dialogue, held a new round of high-level Sino-US economic and trade consultation in Washington with U.S. Trade Representative Lethizer and Finance Minister Mnuchin. Under the guidance of the important consensus of the two heads of state, the two sides held frank, efficient and constructive discussions on economic and trade issues of common concern. The two sides have made substantial progress in agriculture, intellectual property protection, exchange rate, financial services, expanding trade cooperation, technology transfer and dispute settlement. The two sides discussed arrangements for follow-up consultations and agreed to work together towards a final agreement.