The Wednesday Market Minute

  • Global stocks extend gains as U.S.-China trade hopes, alongside dovish central bank signals, continue to support markets.
  • European economic data suggests region's prospects slowly starting to improve as Stoxx 600 benchmark holds near four-year highs.
  • US corporate earnings surprise keeps investors bullish heading into final months of the year, while improving global sentiment lifts government bonds yields.
  • Global oil prices drift after API data showed bigger-than-expected domestic crude build of 4.3 million barrels last week, with EIA data eyed at 10:30 am Eastern Time.
  • Wall Street futures suggest modest gains ahead of after-the-bell earnings from Roku and Qualcomm.

Market Snapshot

Wall Street futures inched higher Wednesday, while global stocks scratched out meager gains and bond yields test multi-month highs, as the ongoing support from progressing U.S.-China trade talks, low central bank interest rates and stronger-than-expected corporate earnings continues to power markets around the world.

With U.S. stocks on pace for their strongest annual gain in at least six years, testing fresh record highs amid a surprisingly solid third quarter earnings seasons that suggests SP 500 profits could slide just 0.9% -- compared to the 3% forecast earlier this fall -- investors are focusing on both the potential for a near-term trade agreement with China and signals of an economic rebound in Europe, where German is teetering on the brink of recession and Britain is gripped by a snap election that has, once again, stalled the country's progress towards ending is three-and-a-half year Brexit drama.

Data Wednesday, however, suggested at least a glimmer of hope that the world's biggest economic bloc could start to catch up to the consistent growth pace set by the United States, with PMI data bouncing from six-year lows for the month of October and German industrial orders rising far more than forecast as export markets slowly return to life amid the U.S.-China detente.

The better-than-expected data had only a modest impact on regional stocks, however, with the Stoxx 600 rising 0.22% by mid-day in Frankfurt to trade close to the benchmark's four-year high, while Britain's FTSE 100 bumped 0.1% to the upside in relatively light trading.

U.S. equity futures, while stronger, look similarly uninspired heading into the start of trading on Wall Street, with contracts tied to the Dow Jones Industrial Average indicating a 35 point gain while those linked to the S&P 500 are guiding for a 5 point bump from last night's close of 3,074.62 points for the broader benchmark.

Match Group (MTCH - Get Report) shares were an early mover of note, falling 12% in pre-market trading after the owner of the Tinder dating app forecast current quarter revenues that missed Wall Street forecasts. 

Weight Watchers International (WW - Get Report) were also under pressure, falling more than 13.5% after its third quarter earnings showed weaker-than-expected revenue gains.

In large cap stocks, CVS Health Corp (CVS - Get Report) gained 2.7% in pre-market trading after topping analysts' forecast for both third quarter earnings and sales, while boosting its full-year profit outlook, as the strength of its 2019 Aetna acquisition continue to support the healthcare group's bottom line.

The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.15% lower at 97.83 while benchmark 10-year Treasury yields edged higher, to to 1.848%, following on from similar moves in markets around the world, including France, where 10-year OATs traded in positive yield territory for the first time since July.

Global oil prices were marked modestly lower, however, even with the weaker U.S. dollar, after data late Tuesday from the American Petroleum Institute indicated domestic crude stocks rose by a bigger-than-expected 4.3. million barrels last month. The Energy Department will publish its official reading at 10:30 am Eastern time.

Brent crude contracts for January delivery, the global benchmark, were seen 20 cents lower from their Tuesday close and trading at $62.76 per barrel, while WTI contracts for December were marked 3 cents higher at $57.20 per barrel.