Day Ahead in U.S. and Global Markets

By Mike Dolan

Markets will face another eventful Wednesday, with a focus on Alphabet's earnings report and a rally in U.S. Treasuries post-elections. This critical fortnight includes upcoming U.S. elections, a Federal Reserve meeting, GDP updates, and significant economic reports from various regions.

Alphabet (NASDAQ: GOOGL) beat earnings expectations, reporting a 35% increase in cloud revenue and a boost in YouTube ad sales linked to elections. The stock rose about 2% pre-market despite a mixed earnings backdrop affecting other tech players. In particular, Advanced Micro Devices (NASDAQ: AMD) saw a 7% drop after revenue forecasts missed estimates.

The tech-heavy Nasdaq had its first record close since July. Meanwhile, U.S. Treasury yields softened, bolstered by lower job openings and strong demand for a $44 billion sale of 7-year notes.

European Economy

In Europe, positive surprises included Germany’s 0.2% growth in Q3 and a 3.4% increase in Spain, despite Italy's stagnation. However, heightened EU tariffs on Chinese electric vehicles pose risks of trade tension. European stocks dropped nearly 1% amid various earnings reports, and automaker Volkswagen reported a significant profit decline, raising concerns in the auto sector.

The Chinese market was affected by U.S. election uncertainties and tariff threats, with both mainland and Hong Kong indexes declining by more than 1%. Discussions of economic stimulus in China could arise in next week’s leadership meeting.

In the UK, finance minister Rachel Reeves is expected to outline tax increases and investment plans, pushing bond issuance to 300 billion pounds. The FTSE index showed slight losses, influenced by GSK’s forecasted drop in vaccine sales.

Key Developments for U.S. Markets:
– U.S. Q3 GDP and inflation measures
– October ADP private sector payrolls
– Earnings reports from Microsoft, Meta Platforms, and more
– British budget presentation by Rachel Reeves
– Speeches from Federal Reserve and European Central Bank officials.