USA EQUITY UNDER PRESSUE, WHILE BOND GAINED AND OIL & GAS STEADY
US stock futures dipped on Friday as both Apple and Amazon released disappointing results after the closing bell the day before. Apple shares dropped more than 3% in extended trading on a revenue miss, which the company attributed to supply constraints, while Amazon stock fell 4% after it posted an EPS that fell short of expectations and offered weak fourth-quarter guidance. Elsewhere, lower-than-expected revenue also dragged Starbucks shares 4% down. Meanwhile, stocks of Chevron and Colgate-Palmolive edged up after topping analysts' expectations. The energy company posted higher-than-expected profit and revenues, while the consumer products maker gains were capped by an outlook of continuing a high-cost environment. For the October month however, all major averages are on track to book strong gains. The Dow Jones is up more than 5% so far and both the S&P 500 and the Nasdaq added more than 6% each.
The yield on the benchmark 10-year Treasury note extended gains to around 1.6% on Friday as investors shrugged off disappointing GDP growth figures as it was not seen as a factor contributing to postponing of interest rates hikes in the US. Traders now look ahead to the Fed meeting next week when the central bank is expected to announce a reduction in bond purchases. Last week, Fed Chair Powell reiterated the central bank would soon begin tapering although high inflation and pressure on wages will likely last into next year but will abate.
US natural gas futures were little changed around $5.8 per million British thermal units on Friday, after sinking 7% the day before, as traders digest global supply and domestic stockpiles. Russian President Vladimir Putin ordered Gazprom to start refilling its European gas-storage facilities and ship more gas to Europe from November 8th. The EIA weekly report showed an 87bcf addition of gas into US storage last week, slightly above market forecasts of an 86bcf increase. Natural gas prices skyrocketed from August and settled around levels not seen since 2014 amid rising demand and tight supply ahead of the winter season. Still, traders believe the US will have more than enough gas in storage for the winter heating season.
US Gasoline futures declined below $2.5 per gallon, tracking losses in the oil market but still remaining close to the highest level since September 2014, amid tight supplies and a strong rebound in global demand. Meanwhile, US government figures showed gasoline inventories fell 1.994 million barrels last week, the third consecutive period of declines and slightly above market expectations. On Tuesday however, API figures showed a surprise rise in stockpiles. Meanwhile, Brent crude futures edged higher to $84.5 per barrel in the last session of the month, not far from a three-year high of $86.7 hit on Monday, on hopes that OPEC nations and allies will agree to stick to the 400,000 bpd monthly output increases at a meeting next week. Meanwhile, the oil producer group sees world oil inventories declining by an average of 1.1 million barrels a day until the end of the year. For the week, the contract is headed for a 1.3% decline, the first weekly drop since August, after US crude stockpiles rose by 4.3 million barrels last week, well above market forecasts of a 1.9 million barrel addition. Downside risks also came from the likely return of Iranian oil to the markets, after the country agreed to reopen negotiations with the EU on the revival of the 2015 nuclear accord.
