In a market wrap, analysts at ANZ Bank New Zealand Limited explained that US equities were up overnight after European bourses followed the bounce in Asian equities.

After week three of the US earnings season, around 250 S&P 500 Index companies have reported Q3 results, representing roughly 60% of total index earnings. Consensus earnings growth expectations now stand at +23% against the same period last year, up from +20% at the beginning of the earnings season. The upside revisions are broad-based, led by technology, healthcare and communication services. Real estate and utilities are the only sec-tors where consensus expectations have been revised to the downside. In contrast to market perception, management guidance has also surprised to the upside. In total, 69% (long-term average 54%) of the companies have beaten earnings expectations, and 55% (average 55%) have beaten sales expectations.

China’s manufacturing gauge softens

China’s PMI data for October were below forecast, with the manufacturing index slipping to 50.2, the lowest since July 2016 when the PMI dipped briefly below the 50 contraction/expansion threshold. The services index was also weaker, dropping to 53.9 from 54.9, also below economists’ estimates and the weakest since August 2017.

Hyundai Construction Equipment has failed to satisfy earnings expectations in the third quarter, said Korea Investment and Securities on Oct. 31 lowering the target price to 110,000 won (US$96.55) from 170,000 won.

Silver prices climb after Monday’s 1.8% decline

Oil tumbled for a third straight week as crumbling equity markets across the globe stoked concern about a slowdown in energy demand growth.

In a market wrap, analysts at ANZ Bank New Zealand Limited explained that US equities were in the green at the time of writing, but gains have eroded throughout the trading day.

US futures set to open higher after inflation data. Asian markets closed mostly lower on trade fears. In Germany, Angela Merkel’s coalition government saw heavy losses in a recent election.

• EUR/JPY has recovered from the lowest levels since late August as benchmark indexes on Wall Street battle their way back from out of oversold conditions.
• USD/JPY takes back the 112 handle and trades within familiar ranges.
• Yen shorts drop back dropped back for a second consecutive week.

EUR/JPY has been strong at the start of the week despite German Chancellor Merkel’s governing coalition party has losing significant support in the wealthy state of Hesse, home to the financial centre of Frankfurt. Both the CDU party and SPD were -10% on the previous election in the Hesse state. “Germans are calling this a ‘schicksalswahl’, or vote of destiny. It may yet seal the fate of this country’s government – and perhaps even its leader,” The BBC reported – (The CDU polled just 28% of the vote. That was down from 38.3% in 2013. The SPD won 20% down from 30.7% in 2013. The Greens came in a close third at 19.5%).

In a market wrap, analysts at ANZ Bank New Zealand Limited noted that even with the above-expectations US GDP figures, equities got another hammering to close out the week.