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Wall Street extends gains amid earnings optimism with Netflix blowing away expectations


US stocks rose for the second straight trading day, as better-than-expected major banks’ earnings continued to fuel the recent rebounding momentum, while the surge in bond yields took a breather, with the US 10-year treasury yield pulling back just under the 4% mark.

Netflix's shares jumped 14% in after-hours trading as the live streaming giant strongly beat earnings expectations, further boosting tech shares in extended hours, with Nasdaq futures jumping 1.83%. United Airlines stock also jumped 8% after hours on a beat on earnings estimates, along with positive guidance. The earnings optimism may continue to lift broad sentiment in today’s session, with all eyes on Tesla’s results tomorrow. 

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  • The Dow rose to the highest level in nearly a month, forming a potential double-bottom reversal pattern, supported by financials and industrial stocks. All 11 sectors in the S&P 500 finished higher, with industrial stocks leading gains, up 2.2%.
  • Netflix’s earnings blew away expectations, with its earnings per share at $3.10 vs. $2.13 estimated, and revenue at $7.93bn versus $7.837bn estimated. The live streamer added 2.41 million subscribers in Q3, well above an estimated 1.09 million. Shares surged 14% after hours. The company said it was very optimistic about its ad-supported tier.
  • Goldman Sachs rose 2.4% amid stronger-than-expected earnings, with earnings per share at $8.25 versus $7.69 estimated, and revenue at $11.98bn versus $11 41bn expected. The bank’s profit, however, fell 43% from the same period a year ago.
  • BYD’s shares jumped 5% after the Chinese EV maker forecasted a 333.6% to 365.11% jump in net profit year-on-year. The company said: “the new energy vehicle industry continued to accelerate its upward trend” despite economic headwinds.
  • The New Zealand dollar spiked on a much hotter-than-expected Q3 CPI data as sticky inflation reinforced an expectation for the RBNZ to raise its official cash rate by 75 bps in November. RBNZ has been hiking rates for 50 bps for a fifth consecutive time since April.
  • Asian markets are set to open lower despite Wall Street’s gains overnight. ASX futures were down 0.43%. Nikkei 225 futures fell 0.11% and Hang Seng Index futures declined 1.14%. The Covid-zero policy and intensified geopolitical tensions between China and US further pressed Chinese stocks.
  • Crude oil continued to fall as China’s Covid-zero policy continued to weigh on the demand outlook. China delayed announcing Q3 GDP data due to its Communist Party Congress, which increases uncertainties about the country’s economic trajectory.
  • 48,000 bitcoins worth $940m have been withdrawn from Coinbase Pro, according to CryptoQuant, which is the biggest outflow of this year, suggesting the accumulative trading may continue as Bitcoin’s price keeps its sideways movement above 18,000, in place since July.  

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