TSMC and Netflix boost Global stock averages

Macroeconomic/ geopolitical developments

• U.S. stock markets saw modest gains, with the S&P 500, Nasdaq, and the Dow extending their six-week winning streak, as smaller-cap indexes outperformed amid strong tech earnings and declining oil prices.
• Strong third-quarter earnings from TSMC, driven by AI chip demand, and Netflix, boosted by higher-than-expected subscriber growth, lifted market sentiment and pushed both companies’ shares higher, fueling gains in the tech sector.

• The European Central Bank lowered its key deposit rate by 0.25% to 3.25% for the second consecutive time, reflecting concerns over slowing economic growth and a faster-than-expected drop in inflation, with markets expecting another cut in December.

• UK inflation dropped to 1.7% in September, its lowest since 2021, prompting expectations of a Bank of England rate cut from 5% to 4.75% in November to support economic growth as wage growth also slows.

• Tesla’s third-quarter earnings report on Wednesday is expected to highlight improved global deliveries and potential margin growth, with analysts projecting a strong performance despite challenges like slowing demand and increased competition, potentially providing a catalyst for the stock amid a busy earnings week.

Global financial market developments

• US and global equity averages extended slowly higher.
• US and European bonds were little changed on the week.
• The US Dollar Index made a new multi-week high.
• Gold futures rallied, hitting another record level.
• Oil futures sold off, now reversing most of October’s gains, as Middle Eastern tensions have not escalated

Key this week

Central Bank Watch: The main central bank activities this week are People’s Bank of China Interest Rate Decision on Monday, and the Bank of Canada Monetary Policy Statement and Interest Rate Decision on Wednesday.

Macro Data Watch: The main macro data release this week is the Global Flash Manufacturing, Composite and Service PMI data on Thursday. Some other releases of note are the  Fed’s Beige Book on Wednesday, and US Durable Goods Orders on Friday.

Earnings Watch: The main US Q3 earning reports this week are Tesla, Coca-Cola, IBM, Boeing and T-Mobile.

Note, macroeconomic data and earnings reports calendars are on the next page.

Steve Miley (The Market Chartist)

Editor in chief

Steve Miley is the Market Chartist and has 32 years of financial market experience and as a seasoned expert now has many responsibilities. He is the founder, Director and Primary Analyst at The Mar... Continued