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Global stocks edged higher Thursday as traders looked to put the worst month for equity markets in at least two years behind them even as most of the headline risks that drove markets lower through the month October, including U.S.-China trade concerns, rising interest rates and slowing economic growth, remain firmly entrenched in investor sentiment.
A bruising October, during which the tech-focused Nasdaq gave back 9.2% in the worst month in nearly ten years, continues to linger in investors' minds, however, and ever a weaker U.S. dollar and the best two-day rally on Wall Street since the summer of 2016, led by big tech names such as Amazon (AMZN) , Alphabet (GOOGL) and Facebook (FB) wasn't strong enough to boost global markets as a mixed set of blue chip earnings in Europe and a Bank of England rate decision later today has stocks on the Continent looking at a cautious start to the month of November.
Early indications from U.S. equity future, however, looked decidedly more bullish, with contracts tied to the Dow Jones Industrial Average indicating a 120 point gain from last night's close, which saw the average gain 241 points, or just under 1%, by end of the session. Futures linked the S&P 500 , the broadest measure of U.S. stocks, were 12 points firmer ahead of earnings from CBS (CBS) , Dow DuPont (DWDP) , Kraft Heinz (KHC) , Metlife (MET) , and Starbucks (SBUX) , while those linked to the Nasdaq Composite were marked 33 points to the upside for the session the precedes Apple's (AAPL) fourth quarter earnings after the closing bell.
Apple shares edged modesty higher in pre-market trading, rising 0.6% to $220.20 each, as investors prepped for the company's critical fourth quarter earnings report after the close of trading that will answer some testing questions related to the impact of the U.S-China trade war and its forecasts for the holiday season.
Apple is expected to post earnings of $2.78 per share over the three months ending in September, the final quarter of its fiscal year, on overall group revenues that could reach a record $61.6 billion. Apple is also expected to have shifted more than 48 million iPhones, which makes up more than 56% of net sales, over the three-month period. That's only 2% higher than the same period last year, but a boost in the unit's average selling price, which could rise to as high as $751, as new products such as the iPhone XR hit key markets.
Last month's global global sell off, which lopped more than 10.2% from the broadest measure of stocks in Asia, the MSCI ex-Japan index, and pushed most benchmarks in China into bear market territory, was curiously driven by concerns for the health of the U.S. economy, which continues to show significant strength in the form of job creation, consumer confidence, corporate earnings growth and business investment.
However, China's slowing growth trajectory, linked to its ongoing trade war with the United States, and the prospect of higher Federal Reserve interest rates that push the dollar higher and make energy and debt servicing costs more expensive for emerging market economies, has offset the solid U.S fundamentals and put markets on a cautious footing into the final two months of the year.
That said, the MSCI benchmark bumped 1.01% higher this morning, while a firmer yen held down gains for the Nikkei 225 in Japan, which shed 1.06%, but market direction is still likely to come from the United States today, and over the near term, as the final days of the third quarter earnings season, which has seen corporate profits grow by a better-than-expected 26.3% from last year, draws to a close.
European stocks were modestly higher at the start of trading Thursday, with the Stoxx 600 risking 0.67%, while Britain's FTSE 100 added 0.22% as the reversed some of its earlier gains to trade at 1.2874 amid reports that London and Brussels have reached a tentative deal on maintaining EU access for UK banks following Britain's exit from the European Union next year.
The moves helped clip around 0.48% from the U.S. dollar index, which benchmarks the greenback against a basket of six global currencies, as it fell from yesterday's 16 month high to trade at 96.66 in early European dealing.
The pound is also likely to remain active ahead of today's Bank of England rate decision in London, where Governor Mark Carney and his colleagues are expected to keep borrowing costs unchanged at 0.75% but could signal further hikes ahead as inflation accelerates and the economy shows remarkable resilience in the face of Brexit uncertainty.
Credit Suisse (CS) was an early market mover of note, with shares in the Swiss-based investment bank falling more than 5% in Zurich after weaker-than-expected third quarter earnings that have raised questions over the momentum in CEO Tidjane Thiam's turnaround plans, before paring the decline to around 2% by mid-day.
Deutsche Bank (DB) shares were also on the move, rising more than 2.6% in Frankfurt after it confirmed that activist investor Hudson Executive Capital LP has taken a stake in Germany's biggest lender just days after disappointing third quarter earnings that helped drag the stock to a fresh all-time low.
Away from equities, global oil markets extended declines following the worst month for benchmark oil prices in at least two years in October as data from the Energy Information Administration showed domestic crude stocks rose for the sixth consecutive week to 426 million barrels, , and U.S. production rates continue to hum along at a near-record pace.
Brent crude contracts for December delivery, the global benchmark, were seen 63 cents lower from their Wednesday close in New York and changing hands at $74.41 per barrel while WTI contracts for the same month, which are more tightly liked to U.S gas prices, were marked 40 cents lower at $64.91 per barrel.