Stock market news: October 24, 2019

Stock futures rose Thursday, as more positive corporate earnings results and a dovish monetary policy decision from the European Central Bank boosted appetite for risk assets.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Reports about U.S.-China trade progress also buoyed sentiment.&nbsp;Bloomberg reported Thursday morning&nbsp;that China was poised to purchase at least $20 billion in agricultural goods in a year — if a partial trade agreement with the U.S. goes through. Purchases of that amount would bring Chinese imports of U.S. farm goods near levels reached before the Trump administration started imposing tariffs.” data-reactid=”16″>Reports about U.S.-China trade progress also buoyed sentiment. Bloomberg reported Thursday morning that China was poised to purchase at least $20 billion in agricultural goods in a year — if a partial trade agreement with the U.S. goes through. Purchases of that amount would bring Chinese imports of U.S. farm goods near levels reached before the Trump administration started imposing tariffs.

Here were the main moves during the pre-market session as of 8:47 a.m. ET:

• S&P 500 futures (ES=F): +0.16%, or 4.75 points

• Dow futures (YM=F): +0.17%, or 45 points

• Nasdaq futures (NQ=F): +0.55%, or 43.75 points

• 10-year Treasury yield (^TNX): -0.7 bps to 1.752%

• WTI crude oil prices (CL=F): -0.38% to $55.76 per barrel

• Gold (GC=F): +0.06% to $1,496.60 per ounce

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Overseas, the&nbsp;European Central Bank (ECB)&nbsp;kept its main refinancing, marginal lending facility and deposit facility rates unchanged at 0.000%, 0.250% and -0.500%, respectively, as had widely been anticipated. The central bank&nbsp;said&nbsp;it intends to keep interest rates “at their present or lower levels” until the inflation outlook nears 2%.&nbsp;Euro area inflation rose&nbsp;just 0.8% in September, the lowest level in nearly three years.” data-reactid=”25″>Overseas, the European Central Bank (ECB) kept its main refinancing, marginal lending facility and deposit facility rates unchanged at 0.000%, 0.250% and -0.500%, respectively, as had widely been anticipated. The central bank said it intends to keep interest rates “at their present or lower levels” until the inflation outlook nears 2%. Euro area inflation rose just 0.8% in September, the lowest level in nearly three years.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The ECB also&nbsp;confirmed the resumption&nbsp;of its quantitative easing program, which was first unveiled last month. Purchases of 20 billion euros per month are set to begin Nov. 1. It will keep these asset purchases running “as long as necessary to reinforce the accommodative impact of its policy rates,” the ECB said.” data-reactid=”26″>The ECB also confirmed the resumption of its quantitative easing program, which was first unveiled last month. Purchases of 20 billion euros per month are set to begin Nov. 1. It will keep these asset purchases running “as long as necessary to reinforce the accommodative impact of its policy rates,” the ECB said.

“Effectively this means that the central bank is now locked-in at a very accommodative monetary stance, and it is difficult to see it shifting to a more hawkish position within the next 12 months,” Claus Vistesen, chief eurozone economist for Pantheon Macroeconomics, wrote in a note Wednesday.

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This rate decision marks the last in Mario Draghi’s eight-year tenure as ECB chief before Christine Lagarde, former chair of the International Monetary Fund, takes the reins.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Policymakers have kept euro area rates persistently low in hopes of stimulating the bloc’s flagging economies. On Thursday,&nbsp;IHS Markit said&nbsp;service sector activity in Germany – the eurozone’s biggest economy – fell to its lowest in more than three-years in October, and employment declined for the first time in six years.” data-reactid=”40″>Policymakers have kept euro area rates persistently low in hopes of stimulating the bloc’s flagging economies. On Thursday, IHS Markit said service sector activity in Germany – the eurozone’s biggest economy – fell to its lowest in more than three-years in October, and employment declined for the first time in six years.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Next week, the Federal Reserve is set to deliver its own monetary decision decision, with consensus analysts largely expecting a similarly dovish posturing. As of Thursday morning, markets priced in a 93.5% probability of a third consecutive quarter-point cut to key borrowing rates, according to&nbsp;CME Group data.” data-reactid=”41″>Next week, the Federal Reserve is set to deliver its own monetary decision decision, with consensus analysts largely expecting a similarly dovish posturing. As of Thursday morning, markets priced in a 93.5% probability of a third consecutive quarter-point cut to key borrowing rates, according to CME Group data.

<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Earnings, earnings, earnings” data-reactid=”42″>Earnings, earnings, earnings

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Investors weighed a mixed bag of quarterly earnings to the upside after big companies, including Microsoft (MSFT) and Tesla (TSLA), handily topped Wall Street’s expectations late Wednesday.” data-reactid=”43″>Investors weighed a mixed bag of quarterly earnings to the upside after big companies, including Microsoft (MSFT) and Tesla (TSLA), handily topped Wall Street’s expectations late Wednesday.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Initially, Microsoft’s stock was little changed after&nbsp;results showed decelerating growth in its cloud unit Azure, which competes with Amazon Web Services (AMZN). However, the stock pushed into the green Thursday morning as investors considered the stronger-than-expected results on other measures. The company delivered estimates-topping sales in its largest segment, More Personal Computing, which encapsulates Windows, Surface, search ads and gaming. Microsoft’s CFO Amy Hood also said during a call with analysts Wednesday that it expects Azure’s gross margins to improve.” data-reactid=”44″>Initially, Microsoft’s stock was little changed after results showed decelerating growth in its cloud unit Azure, which competes with Amazon Web Services (AMZN). However, the stock pushed into the green Thursday morning as investors considered the stronger-than-expected results on other measures. The company delivered estimates-topping sales in its largest segment, More Personal Computing, which encapsulates Windows, Surface, search ads and gaming. Microsoft’s CFO Amy Hood also said during a call with analysts Wednesday that it expects Azure’s gross margins to improve.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Meanwhile, Tesla (TSLA) posted a&nbsp;surprise profit in the third quarter&nbsp;as gross margins improved on its flagship vehicles. The company also said it was ahead of schedule to ramp production at its Shanghai Gigafactory, which will make it less costly for Tesla to deliver electric vehicles to customers in the key China market. It also pulled forward plans to launch the Model Y a season ahead of schedule, in summer 2020 rather than in the fall of that year.” data-reactid=”45″>Meanwhile, Tesla (TSLA) posted a surprise profit in the third quarter as gross margins improved on its flagship vehicles. The company also said it was ahead of schedule to ramp production at its Shanghai Gigafactory, which will make it less costly for Tesla to deliver electric vehicles to customers in the key China market. It also pulled forward plans to launch the Model Y a season ahead of schedule, in summer 2020 rather than in the fall of that year.

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