The main indices on Wall Street started December on a positive note as traders appeared to be in a festive mood at the opening bell on Tuesday.
In the early minutes of trading, the Dow Jones Industrial Average was up 1% at 29,947 while the S&P 500 climbed 0.94% to 3,655 and the Nasdaq rose 0.61% to 12,273.
Optimism around vaccine developments appear to be overshadowing the bleak picture in the US for coronavirus cases, which are currently running at around 12.6mln cases and 268,000 deaths.
Early winners of the session included computer data specialist Micron Technology Inc (NASDAQ:MU), which rose 3.7% to US$66.44 after the company increased its profit and revenue outlook for its first quarter.
8.00am: Wall Street to start December on the front foot
Yesterday, US indices fell as traders banked November’s handsome profits but Wall Street is expected to rise in the first trading session of December.
November’s gains were fired by hopes that a vaccine to combat the coronavirus (COVID-19) and December is expected to show a similar theme.
Spread betting quotes suggest the Dow Jones Industrial Average will open 318 points higher at 29,957; the S&P 500 is expected to jump 38 points to 3,660 and the NASDAQ Composite is tipped to advance 185 points to 12,384.
“On an annualised basis, revenue surged by 367% to US$777.2mln, topping the US$694mln consensus estimate. Keep in mind, in the previous quarter the company saw revenue growth of 355% and that highlights that growth momentum is strong. EPS was 99 cents, easily topping the 76 cents consensus estimate,” reported CMC’s David Madden.
“Some people are speculating that if a vaccine is approved in the near term, it could take the shine off Zoom but in reality, it will probably take a long time for the drug to be mass-produced and rolled out. Therefore we are unlikely to see a return to pre-pandemic life anytime soon so that should keep Zoom’s demand elevated,” Madden suggested.
On the US macroeconomic side of things, most interest today will centre on the ISM manufacturing index for November.
“While the factory sector has recovered strongly in recent months, we suspect that last month’s ISM survey somewhat overstated the vigour. So mimicking the pull-back in yesterday’s Chicago PMI, we expect the headline index to decline 2.3pts to a still very respectable 57.0. The construction spending report for October and auto sales figures for November will also be of some interest. Meanwhile, Fed Chair Powell will testify on the CARES Act before the Senate Banking Committee,” said Daiwa Capital Markets.
Four things to watch for on Tuesday:
- The company calendar for the first day of December will see third quarter earnings delivered from cloud software group Salesforce.com Inc (NYSE:CRM). Traders will also be looking out for any news on the firm’s reported deal to acquire workplace messaging platform Slack
- Also delivering figures on Tuesday is IT firm Hewlett Packard Enterprise Co (NYSE:HPE), which is scheduled to report numbers for its fourth quarter
- In the macro calendar, there may be eyes on the other side of the Atlantic as European Central Bank president Christine Lagarde makes a speech
- Meanwhile, there may also be some interest in a number of speeches from various senior figures in the Federal Reserve system
Story by ProactiveInvestors
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