US equities are smaller as investors enter the earnings flood

What drives the market?

Earnings reports, which started strongly for the quarter, will remain under control as investors assess the strength of the economic recovery from the COVID-19 pandemic, analysts said. Company guidance on the outlook for next year may be even more important in determining market direction.

“Corporate outlook may indicate whether the rally from last year’s low could continue,” Charalambos Pissouros, a senior market analyst at JFD Group, said in a statement.

Read: Why it might still be the first days for stock market inflation

“In our view, with most major central banks suggesting that any rise in inflation this year will prove to be temporary and remain committed to maintaining their monetary policies freer, we believe that even if revenues disappoint somewhat, there is a decent chance that stocks will to come back again and continue the trend to the north, ”he said.

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A takeover of new COVID-19 cases, even as the vaccine continues to be launched, has been seen to hinder sentiment, analysts said. The US registered an average of 67,175 new cases per day in the last week, up 4% from the average two weeks ago. But the new global number of cases almost reached a record high of more than 750,000 on Sunday and Monday, according to the Washington Post, as India and Brazil remain hot spots.

See: Why increasing the number of COVID-19 cases keeps Morgan Stanley optimistic about risky assets

“They are concerned that the spread of covid outside the US could hinder the global economic recovery and lead to the guidance of US companies as they report – especially multinationals,” Fiona Cincotta, senior financial market analyst at City Index, said in a statement. note.

Which companies are concentrated?

• Apple company.
  AAPL,
  -1.11%
  was expected on Tuesday to offer an annual update to the latest generation iPads, along with other new products, and to introduce a paid subscription option in its podcast app when hosting an event in New York. Apple shares rose 0.1%.

• Actions of International Business Machines Corp.
  IBM,
  + 4.05%
  rose 4% after the tech giant surpassed Wall Street estimates, with a surprising increase in revenue, recording a series of four-quarters of sales declines.

• United Airlines Holdings Inc.
  UAL,
  -9.10%
  lost more than $ 1.3 billion in the first three months of 2021, but executives said a cash flow adjustment has turned positive and promised that new international routes to countries that allow vaccinated travelers will help the airline to recover from the devastating COVID-19 pandemic. Shares fell by more than 7%.

• Johnson & Johnson
  JNJ,
  + 2.79%
  On Tuesday, it reported first-quarter profit and sales that exceeded expectations, citing the strength of its pharmaceutical business and the continued recovery of medical devices. Shares rose 1.4%.

• Actions of Abbott Laboratories
  ABT,
  -4.29%
  decreased by 4%, despite the fact that the company achieved results that exceeded earnings expectations in a quarter in which sales of its COVID-19 tests accounted for 20% of total revenue.

• Actions of Procter & Gamble Co.
  PG,
  + 1.19%
  they fell by 0.4% after the consumer commodity producer reported third-quarter tax gains that exceeded estimates and said prices would rise for certain product categories.

• Actions of Kansas City Southern
  KSU,
  + 16.09%
  rose 15% after The Wall Street Journal reported this Canadian National Railway Co.
  CNI,
  -6.26%

  CNR,
  -6.15%
  intends to make a bid for the rail operator of about $ 30 billion, which would be the largest Canadian Pacific Railway Ltd.
  CP,
  -1.78%

  CP,
  -1.46%
  previously agreed on the purchase offer.

• Actions of Philip Morris International Inc. PM increased by 0.6% after the cigarette seller reported profit and revenue in the first quarter that exceeded expectations, as increased supplies of heated tobacco units helped offset declines in cigarette deliveries.

See: Tobacco stocks turn to ash after report Biden administration may require nicotine cuts

What are other markets doing?

• Yield on 10-year treasury note BX: TMUBMUSD10Y
  decreased by 0.5 basis points to 1.589%, as the bond market remained consolidated, following a recent short hedging rally, yields fell from 14-month highs. Bond yields and prices are moving in opposite directions.

• ICE US Dollar DXY Index,
  + 0.05%,
  a measure of the currency against a basket of six major rivals was flat.

• In the future, oil has risen, with US reference CLM21,
  -1.58%
  up 0.3% to $ 63.63 a barrel.

• Gold futures GC00,
  + 0.48%
  wiped out the early weakness to move higher, rising 0.4% to $ 1,777 an ounce.

• In Europe, the Stoxx 600 SXXP,
  -1.90%
  and FTSE 100 UKX in London,
  -2.00%
  they each decreased by 1.5%.

• In Asia, the Hong Kong HSI Hang Seng Index,
  + 0.10%
  increased by 0.1%, while Shanghai Composite SHCOMP,
  -0.13%
  decreased by 0.1%, and the Japanese Nikkei 225 NIK,
  -1.97%
  decreased by 2%.