NEW YORK, Oct 17 — Wall Street was set for a higher open today, after Britain struck a preliminary last-minute deal with the European Union helping to ease some geopolitical jitters, while upbeat earnings from Netflix and Morgan Stanley affirmed a strong start to the reporting season.
British Prime Minister Boris Johnson said “we have a great new Brexit deal,” lifting the mood across global equities, while he is yet to receive approval for the agreement in a vote at a session of the British parliament on Saturday.
“Although, the agreement reached between the UK and EU needs to be approved by the British parliament, the headline news coupled with US earnings should boost market sentiment,” said Peter Cardillo, chief market economist at Spartan Capital Securities in a client note.
Netflix Inc shares jumped 8.7 per cent in premarket trading, after the video streaming service provider added slightly more paying subscribers than Wall Street expected in the third quarter.
Morgan Stanley gained 4 per cent after the big lender beat analysts’ expectations for quarterly profit, buoyed mainly by a strong performance in its trading business.
This followed upbeat results earlier in the week from major US lenders JPMorgan Chase & Co, Citigroup Inc, Bank of America and healthcare giants Johnson & Johnson and UnitedHealth Group Inc
The mood was also lifted after the Chinese Commerce Ministry said it hoped to reach a phased agreement in a protracted trade dispute with the United States and cancel tariffs as soon as possible.
Rising uncertainties around the US-China trade war, increasing geopolitical risks and weak domestic economic indicators have recently hit sentiment, with investors now focusing on third-quarter earnings for clarity on these factors impacting Corporate America.
Analysts are expecting S&P 500 third-quarter earnings to fall by 3 per cent, which would mark the first year-on-year contraction since the earnings recession that ended in 2016.
However, of the 43 S&P 500 companies to have posted quarterly results so far, 86 per cent have beaten expectations.
At 7:12 am ET, Dow e-minis were up 73 points, or 0.27 per cent. S&P 500 e-minis rose 8.25 points, or 0.28 per cent and Nasdaq 100 e-minis were up 26.5 points, or 0.33 per cent.
Among other stocks, International Business Machines Corp slipped 5 per cent after it missed quarterly revenue estimates due to weakness in its global technology services unit. — Reuters
