U.S. Stocks Closed Mixed, Wells Fargo Beats Expectations, Surges Over 3%

U.S. stocks closed with mixed results on Friday. The S&P 500 index recorded its second consecutive weekly gain.

Traders were closely monitoring the earnings reports of major banks and the situation in the Middle East.

A Fed official suggested that the Federal Reserve could keep interest rates “on hold.”

On Friday, the yield on the US 10-year Treasury note dropped by 9 basis points to 4.621%. Bond prices move inversely to yields.

Commenting on the drop in U.S. bond yields, Christophe Barraud, Chief Economist and Strategist at Market Securities LLP, stated, “Bonds rebounded ahead of the weekend, as traders may seek to hedge geopolitical risks.”

Michael Hartnett, a Bank of America strategist, noted that as long as the 10-year bond yield stays below 5%, the U.S. stock market can remain positive, with the S&P 500 index potentially staying above 4,200 points in the short term.

U.S. Stocks

Fundamental Analysis:

Microsoft successfully completed its $69 billion acquisition of Activision Blizzard after nearly two years of regulatory challenges.

JPMorgan Chase reported a record-high net interest income for the third quarter and raised its full-year outlook. The company’s adjusted revenue for the third quarter was $40.69 billion, exceeding analysts’ expectations of $39.63 billion. Diluted earnings per share were $4.33, surpassing analysts’ expectations of $3.96.

Wells Fargo exceeded expectations for its third-quarter performance. The company reported third-quarter revenue of $20.86 billion, beating market estimates of $20.16 billion, and earnings per share of $1.48, surpassing the market estimate of $1.25.

UnitedHealth Group reported third-quarter revenue of $92.4 billion, surpassing expectations.

Technical Analysis:   

(S&P 500 Index, 1-day chart)

Market Trends:

  • Dow Jones Industrial Average rose by 39.15 points, a 0.12% increase, closing at 33,670.29 points.
  • Nasdaq Composite Index (Nasdaq) fell by 166.98 points, a 1.23% decrease, closing at 13,407.23 points.
  • S&P 500 Index dropped by 21.83 points, a 0.50% decrease, closing at 4,327.78 points.

Hong Kong Stocks

In Hong Kong, the three main stock indices opened lower and remained in negative territory.

Core technology stocks mostly declined, with Bilibili and Baidu Group falling by over 2%, and Tencent Holdings and Kuaishou dropping by over 1%.

Real estate stocks also saw declines, with Longfor Group leading the way with a decrease of over 6%.

Automobile stocks were down across the board, with XPeng Motors falling by over 3%. Internet healthcare stocks faced losses, with JD Health declining by over 4%.

In contrast, oil stocks rose, with CNOOC gaining nearly 1%.

Gold stocks led the gains, with China Gold International rising over 2%.

Geopolitical tensions, particularly the escalation of the Israeli-Palestinian conflict, increased market risk aversion.

As a result, international oil and precious metal prices surged significantly, with international gold futures surging by 3%, marking the largest single-day increase this year.

Technical Analysis:   

(Hang Seng Index, 1-day chart)

Market Trends:

  • Hang Seng Index (HSI) declined by 0.43%, closing at 17,737.68 points.
  • Hang Seng Tech Index (HSTECH) fell by 1.06%, closing at 3,838.90 points.
  • Hang Seng China Enterprises Index (HSCEI) dropped by 0.49%, closing at 6,086.09 points.

FTSE China A50 Index

Fundamental Analysis:

A-shares experienced mixed results as the three major indices opened with both gains and losses but later moved lower.

The Shenzhen Component Index and the ChiNext Index both dropped by over 1%.

The total trading volume for the Shanghai and Shenzhen stock markets was CNY 5,252.41 billion, with a net outflow of CNY 44.15 billion from northbound funds.

Out of 52 stocks, 47 hit their daily limit up, while 5 hit their daily limit down.

In terms of industry sectors, sectors like mining, precious metals, gas, petroleum, and building materials led the gains, while energy metals, semiconductors, batteries, electronic components, and power equipment were among the sectors with the most significant losses.

Technical Analysis:

(SSE Composite Index, 1-day chart)

Market Trends:

  • Shanghai Composite Index (SHCOMP) dropped by 0.4%, closing at 3,075.8 points.
  • Shenzhen Component Index (SZCOMP) fell by 0.99%, closing at 9,968.99 points.
  • ChiNext Index (CHINEXT) declined by 1.37%, closing at 1,969.24 points.
  • SSE STAR Market 50 Index (SSE50) dropped by 1.49%, closing at 878.47 points.

Forward-looking Statements   
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