US indices to open mostly lower with Nasdaq the outlier

The third-quarter earnings season has kicked off in the US but investors seem more concerned with the status of a coronavirus (COVID-19) vaccine trial.

The Dow Jones Industrial Average is expected to give back 99 points of yesterday’s gains and open at around 28,740 while the S&P 500 is see kicking off four points lower at 3,530.

The tech-heavy NASDAQ Composite, however, looks set to blaze its own trail (again) with a 310 point gain. According to Jasper Lawler at LCG, today’s launch of the first 5G iPhone as well as Amazon Prime Day “has got the juices flowing for tech investors”.

A pause in the Johnson & Johnson COVID-19 vaccine has taken the wind out of the sails of the bulls’ boats.

“Though a pause in a trial – this time due to ‘an unexplained illness in a study participant’ – isn’t exactly out of the ordinary, it still dealt a blow to the market’s faint, naïve hopes of a vaccine arriving this side of Christmas,” said Connor Campbell at Spreadex.

Johnson & Johnson is one of the companies releasing an earnings update today. The shares were off in pre-market trading despite the healthcare titan topping expectations with third-quarter adjusted earnings per share of US$2.20, versus expectations of US$1.98.

Investment bank JP Morgan Chase was another to beat the consensus forecast, with earnings per share of US$2.68 – 45 cents above the median forecast of analysts who follow the stock. The shares were little changed in pre-market trading.

Five things to watch for on Tuesday:

• As mentioned, tech giant Apple Inc (NASDAQ:AAPL) will be holding a large amount of investor attention ahead of its iPhone launch event later today which is expected to see an appearance from its much touted 5G version of the iconic smartphone
• Meanwhile, JP Morgan will also be in focus after the banking giant kicked off the US third quarter earnings season by beating estimates thanks to a jump in investment banking fees
• Fellow big bank Citigroup will also be in focus as its own quarterly results are expected today ahead of a plethora of other financial giants later this week
• Share price reaction will be eyed from Johnson & Johnson after it was forced to pause a trial of its coronavirus vaccine candidate after one of its patients suffered an as yet unexplained illness
• On the macro data front, US inflation data for September will be holding most of the attention. August’s figure of a 1.3% increase was ahead of the 1.2% forecast and higher than July’s figure of 1%. Consensus is forecasting last month’s figure will creep up to 1.5%

Story by ProactiveInvestors