Wall Street futures rose sharply on Tuesday, pointing to another day of gains as the U.S. earnings season kicks into high gear.
S&P 500 futures climbed 1.9% and Dow Jones Industrialists added 1.6%.
Major indices posted significant gains to open the week on better-than-expected corporate earnings, although a strong US dollar could reduce sales and profits for companies that do a lot of business overseas.
Johnson & Johnson, which makes nearly half of its sales outside the United States, beat third-quarter expectations but narrowed its 2022 guidance range due to the strengthening dollar. Shares rose 1.7% before the bell.
Goldman Sachs posted quarterly profit of $3.07 billion, easily beating Wall Street expectations and shares rose nearly 3%.
Netflix and United Airlines release their results after the closing bell on Tuesday. Tesla, American Airlines and two major railroads, which are in the midst of a disputed union vote on a new contract, release their results on Thursday.
The dollar was trading at 149.13 Japanese yen, down from 148.98 yen. Senior Japanese officials have signaled they may intervene in the market to try to stem volatility and support the yen, which has weakened sharply against the dollar this year.
The euro fell to 98.31 cents from 98.41 cents. The soaring dollar is now worth more than the euro for the first time in 20 years.
In Europe at midday, the German DAX rose 1.3% while the CAC 40 in Paris and the FTSE in London each climbed 0.9%.
UK government bonds rallied after the country’s new Treasury chief scrapped nearly all of a series of unfunded tax cuts that had rattled markets.
Elsewhere, the release of the most recent figures on China’s economic growth, due on Tuesday, has been postponed, removing a factor that was expected to boost trade. No specific reason was given, but the GDP report could have clashed with the confident tone of a Communist Party congress being held in Beijing.
There was little immediate news from the convention, where the party is expected to unveil its top leadership for the next five years a day after the rally ends.
Economists say the world’s second-largest economy may have seen growth as low as 3% in the last quarter, barely half the official target of 5.5%.
The data was not likely to “paint a particularly positive picture of China’s economy” when finally released, ING Economics said in a report, adding that “the delay suggests that the government believes the 20th Congress of the Parti is the most important thing happening in China right now and I would like to avoid further information flows that could create mixed messages.”
In Asian trading on Tuesday, Hong Kong’s Hang Seng Index jumped 1.8% to 16,914.58. The Shanghai Composite Index slipped 0.1% to 3,080.96.
Tokyo’s Nikkei 225 index rose 1.4% to 27,156.14 and Seoul’s Kospi climbed 1.4% to 2,249.95. In Australia, the S&P/ASX 200 rose 1.7% to 6,779.20. The Indian Sensex rose 0.8%.
Wall Street indices remain significantly lower than they were at the start of this year. The S&P 500 and Russell are down more than 22%, while the Nasdaq is down more than 31%. The Dow is down almost 17%.
Investors fear inflation will raise recession risks as the Federal Reserve and other central banks raise interest rates to curb soaring prices.
The latest round of corporate financial results could help give investors a clearer picture of how businesses and consumers are handling inflation.
Other big names reporting profits this week include American Airlines, Union Pacific and American Express.
In energy trading, the benchmark U.S. crude fell 12 cents to $85.34 a barrel in electronic trading on the New York Mercantile Exchange. It lost 15 cents to $85.46 a barrel on Monday.
Brent crude, the pricing basis for international oil, was essentially unchanged at $91.17 a barrel.
On Monday, the S&P 500 climbed 2.6% and the Dow Jones Industrial Average 1.9%. The Nasdaq gained 3.4%, while the Russell 2000 Index rose 3.2%.
Kurtenbach reported from Bangkok; Ott reported from Washington.
This story was originally published October 18, 2022 2:06 a.m.