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25.10.202305:48 Forex Analysis & Reviews: Wall Street on the Rise: Reports and Forecasts That Changed the Game

Exchange Rates 25.10.2023 analysis

There's positive movement in the stock market: the Dow, S&P, and Nasdaq indices are confidently moving upward, showing increases of 0.62%, 0.73%, and 0.93%, respectively.

Trading Tuesday on Wall Street ended on a high note. Corporate revenues that surpassed forecasts and positive expectations filled investors with optimism, sparking a widespread interest in stocks.

The three main U.S. stock indices showed growth. Key stocks, most dependent on interest rates, demonstrated particular activity, as the yield on treasury bonds remained steady, staying far from the record peak of 5%.

The current corporate reporting season is in full swing, and many companies from the S&P 500 index are expected to present their results soon. According to data from LSEG, out of the 118 companies that have already reported, 81% exceeded analysts' forecasts.

In terms of numbers, the Dow Jones index increased by 204.97 points, the S&P 500 index added 30.64 points, and the Nasdaq Composite index grew by 121.55 points.

Speaking of sectoral dynamics, utility stocks in the S&P 500 showed the most robust growth. In contrast, the energy sector lost ground due to falling oil prices.

The positive trend in the stock market continues, bolstered by outstanding corporate performances.

Verizon (VZ.N) pleased shareholders with a stock surge of 9.3% after revising its annual free cash flow forecast upwards. General Electric (GE.N) shares also show steady growth, rising 6.5%, thanks to an increased annual profit forecast.

Coca-Cola (KO.N) didn't stay behind, and after updating its annual sales forecast, stimulated its stock growth by 2.9%. Meanwhile, 3M (MMM.N) reports a stock increase of 5.3% against the backdrop of a highly-rated quarterly report.

Aerospace company RTX's (RTX.N) metrics are also impressive – its shares soared by 7.2%, surpassing all expectations.

Shifting to macroeconomics, the current month is characterized by rising business activity in the US, as confirmed by the preliminary PMI indices from S&P Global.

All investor attention is directed towards the upcoming Thursday: the US Department of Commerce plans to present preliminary GDP data for the third quarter. Analyst forecasts hint at an acceleration of the indicator to 4.3% compared to 2.1% in the previous quarter.

The next day, on Friday, the long-awaited Personal Consumption Expenditures (PCE) report is expected to be published. Experts believe that the report will reveal details confirming a gradual slowdown in inflation to the Federal Reserve's target level of 2% on an annual basis.

Bill Mertz, head of capital market research at U.S. Bank Wealth Management in Minneapolis, expressed his concern about the current economic situation.

"Can the Fed control inflation at an acceptable level without letting it significantly worsen the situation for American consumers?" he pondered. In his opinion, successful inflation management will reduce the risk of a recession in the US economy.

After publishing quarterly reports, Microsoft Corp's (MSFT.O) stocks showed growth. Meanwhile, Alphabet Inc's (GOOGL.O) shares lost ground amidst the reports.

Currency fluctuations also made themselves felt: the dollar strengthened by 0.6% against major currencies, while the yen continued to hover around the level of 150 per dollar. The market speculates that upon reaching this mark, Japan might take steps to stabilize its national currency.

In the cryptocurrency sector, news was also quite noticeable: Bitcoin increased its value to an 18-month peak, then slightly dropped to $33,712. Rumors about the creation of an exchange-traded fund gave investors confidence, leading to the closing of short positions.

Oil quotes are on a downward trend, considering recent data from European countries indicating a potential decrease in oil demand. As a result, Brent and WTI oil prices fell by 2%.

Gold, in turn, remains at a stable mark, amounting to $1,972 per ounce.

Thomas Frank,
Analytical expert of InstaSpot
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