Dow Futures Edge Higher Ahead of Major Earnings

LONDON — Stock index futures at 7am ET indicate that the Dow Jones Industrial Average (DJINDICES: ^DJI) may open up by 0.12% this morning, while the S&P 500 (SNPINDEX: ^GSPC) may open up by 0.14%, as investors speculate that the US government shutdown has made an early end to the Fed’s stimulus program less likely. CNN’s Fear & Greed Index has risen to neutral following the debt ceiling deal, and is expected to open at 48 this morning, after closing at 44 yesterday.

Most European markets made modest gains this morning, as investors were encouraged by the latest economic data from China, which showed that the nation’s economy grew at an annualised rate of 7.8% during the third quarter, up from 7.5% during the second quarter. However, some of the underlying data were weaker — industrial activity and retail sales fell, for example — raising questions about how sustainable the current level of GDP growth will be. At 7am ET, the FTSE 100 was up 0.37%, the DAX was up 0.19%, and the CAC 40 was up 0.52%.

Today’s economic calendar is empty, as the scheduled September leading indicators report has been delayed by the government shutdown. However, next week will see the publication of a number of previous-delayed reports, including the key September nonfarm payrolls and unemployment rate, which are due on Tuesday. September’s import price index will be published on Wednesday, while August’s job openings and labour turnover report (JOLT) will be published on Thursday.

Earnings season is now in full swing, and today sees a raft of big earnings report. Earlier this morning, General Electric reported adjusted earnings of $0.36 per share for the third quarter, unchanged from the same period last year, while oil services firms Schlumberger and Baker Hughes both reported strong earnings growth during the last quarter. SunTrust Banks and Textron both reported sharp falls in quarterly earnings per share this morning, and Honeywell International and Morgan Stanley are also due to report before this morning’s opening bell.

Google may be actively traded when markets open, after the search firm beat expectations with its latest earnings and revenue figures, which were published after markets closed last night. Google shares were up by 8.4% in pre-market trading this morning, at $963, and may hit an all-time high if these gains hold when trading starts.

Finally, let’s not forget the Dow's daily movements can add up to some serious long-term gains. Indeed, Warren Buffett recently wrote: "The Dow advanced from 66 to 11,497 in the 20th Century, a staggering 17,320% increase that materialized despite four costly wars, a Great Depression and many recessions."

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> Roland does not own shares in any of the companies mentioned in this article. The Motley Fool owns shares in Google.