Strong US earnings are making investors focus on the strong US economy and are tentatively driving equites 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 loss 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.