Stocks Finish at Record High, Apple, Amazon Post Weak Earnings

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Principal Points

• Stocks on Wall Street advanced to fresh all-time high as optimism stays elevated
• Apple and Amazon delivered weak third-quarter earnings after the closing bell

What’s Moving in the Markets?

Wall Street stocks rallied to a fresh closing record on Thursday. Broadly, stocks thrived with increased investor optimism around the stronger-than-expected corporate earnings season. That said, solid buying momentum pushed the S&P500 and the Nasdaq Composite to new all-time highs.

The Dow Jones Industrial Average, on the other hand, finished a few points below its record set earlier this week.

In individual stocks amid the financial markets, shares of Apple and Amazon accelerated during the entire session yesterday. The reason behind the rally was heightened risk appetite from investors looking to see both companies’ reports for the quarter. In more detail, Apple and Amazon delivered their third-quarter earnings reports after the bell.

Surprisingly, however, both technology giants produced financial results below analyst estimates. Citing supply-chain disruptions and labor-market troubles, Amazon CEO Andy Jassy said he expected the fourth quarter to be even weaker. In addition, Apple CEO Tim Cook also highlighted similar challenges that have hampered the iPhone maker’s business operations.

What’s the Big Picture for Traders?

Economic challenges have had mixed effects on the companies that reported their quarterly financials over the past couple of weeks. With this in mind, traders and investors are bracing for increased volatility as the market moves to the month of November.

Several crucial updates are expected to dictate the pace of the financial markets next week. First, the US Federal Reserve is gathering for its two-day policy meeting Tuesday and Wednesday. As a result, Fed Chair Jerome Powell will hold a press conference on Wednesday.

In it, Mr. Powell is likely to give hints over the central bank’s framework for tapering, or unwinding, the vast monetary support. To this end, the Fed has been injecting as much as $120 billion per month in asset purchases. The idea behind the extraordinary amounts of cash was to help the economy bounce back from the coronavirus crisis.

Also, market participants will be watching the latest jobs report on Friday. In other words, the nonfarm payrolls data will reveal how many new jobs were added in October.

What to Watch in the Markets?

The seemingly unstoppable rally of Tesla stock has propelled Elon Musk’s net worth to soar above $300 billion. That said, market participants will be closely monitoring the skyrocketing price of Tesla shares. On Thursday, Tesla pumped another 4%, adding to a weekly gain of almost 20%.

In turn, Tesla chief executive now commands a personal fortune of $302 billion according to the Bloomberg Billionaires Index. It took Elon Musk just a week to accumulate a staggering $50 billion to top $300 billion. As a result, he is $100 billion richer than the second person on the rich list, Amazon founder Jeff Bezos.

Economic Data Coming Up Today (EST times)

On Friday, forex traders will have a chance to play around with the volatility in the European currency. In particular, the EUR/USD is expected to see elevated swings as Europe reports its inflation numbers or CPI data. To be precise, Europe’s consumer price index report (CPI) for October will arrive at 05:00 am.

Later, Canada will report its GDP numbers for August at 08:30 am. This means heightened volatility in the Canadian dollar could be expected.

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