U.S. equity indexes experienced a notable rise on Monday, with the S&P 500 and the Dow Jones Industrial Average reaching fresh intraday record highs. Investor optimism is bolstered by the anticipation of earnings reports this week, which follow a promising start last Friday from major banks. The Nasdaq Composite climbed 0.8% to 18,498.2, while the S&P 500 increased by 0.7% to 5,856.8.
The Dow Jones Industrial Average moved up 0.4% to 43,046.5 shortly after midday on Monday. Throughout the session, the S&P 500 and the Dow reached new 52-week highs. Notably, all sectors saw gains, with the exception of energy, making technology and utilities the standout sectors. This week’s quarterly earnings reports feature a range of prominent companies including Bank of America, Goldman Sachs, Citigroup, Morgan Stanley, ASML Holdings, Taiwan Semiconductor Manufacturing Company, and American Express.
Last Friday, JPMorgan Chase reported Q3 earnings that unexpectedly increased year-over-year, coupled with revenues exceeding market forecasts. Similarly, Wells Fargo posted Q3 earnings above expectations. Given the recent upward trend in the stock market, investors are generally optimistic that earnings will sustain momentum, as significant multiple expansions are unlikely to elevate indexes significantly beyond current levels. In related news, key officials from the Federal Reserve took to the speaking circuit on Monday.
Minneapolis Fed President Neel Kashkari and Fed Governor Christopher Waller are among those expected to share insights this week, while San Francisco Fed President Mary Daly and Chicago Fed President Austan Goolsbee will also offer their perspectives. These discussions come in the wake of mixed inflation data reported last week, following an impressive nonfarm payrolls report from early October which effectively diminished expectations for a further 50-basis point interest rate cut. According to the CME Group's FedWatch Tool, on Monday, the likelihood of a 25-basis point rate cut on November 7 stands at 87%, with a 13% chance of a pause in the current target range of 4.75% to 5%. U.S.
Treasury yields displayed mixed results during the day. The yield on the 10-year note remained steady at 4.1%, while the two-year yield dropped 4.6 basis points to 3.95%. The CBOE Volatility Index, often referred to as the fear gauge for investors, decreased by 3.3% to settle at 19.79. In the commodities market, West Texas Intermediate crude oil saw a decline of 2%, dropping to $74.04 a barrel. Additionally, the Organization of the Petroleum Exporting Countries (OPEC) revised its global oil demand projections for 2024 and 2025 downward while maintaining steady supply estimates.
In its latest monthly oil report, OPEC adjusted its demand growth estimate for the current year to 1.93 million barrels per day, down from the 2.03 million barrels previously projected in September. This revision reflects recent actual data received and slightly less robust demand expectations in various regions. In company-specific news, Longboard Pharmaceuticals, identified by the ticker symbol $LBPH, has agreed to be acquired by the Danish pharmaceutical firm H.
Lundbeck in a deal valued at approximately $2.6 billion. Following the announcement, Longboard shares surged by more than 51%. Meanwhile, BNP Paribas Exane initiated coverage on Vistra, denoted as $VST, with an ‘outperform’ rating and a price target of $231. Subsequently, Vistra’s shares saw an intraday jump of 5.7%, making it the leading gainer on the S&P 500. In the precious metals market, gold prices fell by 0.4% to $2,664.71 per ounce, while silver decreased by 1.2%, settling at $31.36..