The news shaping the markets today

Ukraine said that 218 vessels had been blocked after Russia suspended its participation in a grain export deal. The US dollar index traded higher on continued geopolitical tensions.

China’s NBS Composite PMI Output Index fell to a five-month low of 49.0 in October, from 50.9 in the previous month, exerting pressure on the CNY/USD forex pair.

Australia’s retail sales grew by 0.6% to a new record higher of A$35.10 billion in September. The country’s retail trade growth for the ninth straight month sent the AUD/USD pair higher in forex trading this morning.

Japan’s industrial production contracted by 1.6% in October, much more than market expectations of a 1.0% decline. The news exerted pressure on the JPY/USD forex pair.

Colombia’s central bank raised its benchmark rate by 100bps to 11.0% at its latest meeting. However, the COP/USD pair remained broadly flat in forex trading this morning.

What’s happening: US oil majors ExxonMobil and Chevron released results for the latest quarter on Friday.

What happened: The results from ExxonMobil and Chevron showed that energy producers had notched another quarter of record-breaking profits.

The two supermajors reported a sharp rise in combined profits, which is double what they had recorded in the year-earlier quarter.

How were the results: Exxon reported the most substantial profit in its history, while Chevron’s latest profit was the second-best ever.

• Exxon reported a profit of $4.45 per share, up sharply from $1.58 per share in the year-ago quarter. The figure also topped market views of $3.65 per share. Revenues surged 52% year-over-year to $112.07 billion fell short of the consensus estimate of $115.60 billion.
• Chevron’s net profit jumped 84% from a year ago to $11.2 billion. The company reported adjusted earnings of $5.56 per share, handsomely exceeding market expectations of $4.91 per share.

Why it matters: Energy shares have outpaced the broader market this year. The S&P 500 energy index has gained around 61%, versus a 26% decline in the tech index.

Exxon’s profits surged at a time when most analysts had projected a decline. The company’s earnings surged to a record $19.7 billion, almost tripling from the year-ago quarter. Free cash flows also climbed to a record $24.4 billion, significantly topping market views.

Chevron also disclosed its second-best quarterly results ever, driven by higher oil output and natural gas prices. Natural-gas prices jumped to record levels during the third quarter, helping both oil giants to record healthy upstream profits.

Exxon announced a fourth-quarter dividend of 91 cents per share, up 3 cents per share previously. Oil-equivalent production was 3.7 million barrels per day in the third quarter, higher by more than 50,000 bpd in the prior quarter.

Exxon and Chevron combined recorded around $31 billion in profits for the quarter.

How shares responded: ExxonMobil’s shares gained 2.7% to close at $110.70 on Friday, while Chevron’s stock rose 1.2% to settle at $179.98.

What to watch: Investors will keep an eye on oil demand during the winter months. Markets will also monitor the next moves by OPEC+ (Organization of the Petroleum Exporting Countries and its key allies), which has announced plans to reduce oil output by 2 million bpd in November.

The markets today

US stocks will be in focus today ahead of a couple of major economic reports

Context: Wall Street settled higher on Friday as investors assessed the latest economic reports.

Details: Tech shares had come under pressure last week following weak earnings releases and projections from companies like Alphabet, Microsoft and Meta Platforms.

However, US stocks rose sharply on Friday, despite a steep decline in Amazon’s stock on downbeat revenues and a weak sales forecast for the fourth quarter.

Apple’s shares surged around 7.6% on Friday after the iPhone maker exceeded Wall Street expectations for both revenues and earnings. Intel’s shares also gained around 10.7% after the company reported better-than-expected earnings.

Overall market sentiment was also lifted by economic data. The core personal consumption expenditures price index, which is the preferred inflation gauge for the US Federal Reserve, rose 0.5% in September, coming broadly in line with estimates. Personal spending grew 0.6%, higher than market expectations.

All the major indices ended the week higher, with the Dow Jones index recording gains for the fourth straight week. The blue-chip index gained around 5.7%, while the S&P 500 added 3.9% in the week.

The Dow Jones index climbed 828.52 points, or around 2.6%, to close at 32,861.80 on Friday. The S&P 500 rose about 2.5% to 3,901.06, while the Nasdaq 100 jumped 3.17% to settle at 11,546.21 in the session.

What to watch: Investors await the release of economic reports on the Chicago PMI and Dallas Fed manufacturing index from the US today. The Chicago PMI, which dropped sharply to 45.7 in September, is expected to decline further to 44 in October. Analysts expect the Federal Reserve Bank of Dallas’ general business activity index for manufacturing in Texas to decline to -18 in October, from -17.2 in September.

Other Markets: European trading indices closed mostly higher on Friday, with the DAX 40, CAC 40 and STOXX Europe 600 up by 0.24%, 0.46% and 0.14%, respectively, and the FTSE 100 index up by 0.37%.

Support & resistances for today

Market snapshot

What else to watch today

South Africa’s private sector credit, money supply M3 and balance of trade, Germany’s retail sales, Spain’s retail sales and current account, Italy’s gross domestic product, UK’s consumer credit, number of mortgage approvals, mortgage lending, net lending to individuals and Nationwide house price index, Eurozone’s GDP growth rate and inflation rate, India’s infrastructure output and central government budget value, Mexico’s GDP growth rate, as well as Brazil’s government budget value and Central Bank of Brazil’s focus market readout.

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