Nasdaq 100 Snaps Back After Tesla’s Strong Earnings

Also, 30-year T-bond, gold, natural gas and Japanese yen futures

1. Nasdaq 100 E-mini futures (/NQ): +0.86% 
2. 30-year T-bond futures (/ZB): +0.29% 
3. Gold futures (/GC): +0.89% 
4. Natural gas futures (/NG): +3.59% 
5. Japanese yen futures (/6J): +0.39% 
   

Yesterday’s sea of red has been greeted by greener pastures on today, with the Nasdaq 100 leading the way higher in the wake of the Tesla (TSLA) earnings report, which has sent the shares up by nearly 15% pre-market. The ebb and flow of geopolitical tensions has oil prices lower and, in turn, relief for bond prices. Lower U.S. Treasury yields are undermining the U.S. dollar, which may be helping to prop up precious metals—although both yields and the greenback have taken back some weakness after the release of the weekly U.S. jobless claims report. 

Tesla may have revived market sentiment after reporting earnings after the bell on yesterday, with Nasdaq futures (/NQZ4) up 0.89% this morning. The electric vehicle maker projected 20% sales growth next year as it prepares to launch a lower-priced model. The guidance impressed investors looking for a more modest 15% figure.

TSLA was up nearly 15% in pre-market trading. Elsewhere in the market, Boeing (BA) fell over 2% after its machinist union rejected the company’s latest offer to raise wages 35%, among other benefits. American Airlines (AAL) rose around 2% ahead of the bell after impressing investors with its quarterly earnings. Southwest Airlines (LUV) was nearly unchanged despite beating earnings expectations. 

Bonds rose and yields fell despite the fact initial jobless claims data for the week ending Oct. 19 fell from the week before. The week-before figure was also revised higher, but continuing claims rose to the highest since late 2021. The 30-year T-Bond futures (/ZBZ4) rose 0.29% this morning. Despite today’s gain, the contract remains on track to record a sixth weekly loss.  

Gold prices (/GCZ4) retraced some of yesterday’s losses as traders took advantage of a weaker dollar and lower yields. Technically, both gold and silver have returned to trend support levels that could ultimately define whether or not the recent breakouts are legitimate. On the equity side of the metals market, Newmont (NEM)—the world’s largest gold producer—fell around 3% ahead of the bell after the miner reported disappointing earnings and sales figures for 3Q ’24. 

Crude oil prices were higher this morning, but the commodity trimmed overnight strength as U.S traders came online. The Energy Information Administration (EIA) reported a surprise build in crude oil inventories yesterday, however, much of that could be attributed to the hurricane that barreled through the Gulf of Mexico earlier this month, leading to a surge of imports that were backlogged. The softer dollar is helping buyers, although this week’s gain has only retracted about half of last week’s losses. Meanwhile, markets continue to wait for Israel’s response to Iran’s latest attack. 

A pullback in U.S. Treasury yields is helping to provide some relief in FX markets, following a streak of prolonged U.S. dollar strength. The bounce-back in metals and energy is proving fortuitous for the Australian dollar (/6AZ4), the top performer today. But the rates relief is likewise providing room for the Japanese yen (/6JZ4) to post its first daily gain this week. /6JZ4 is nearly 8% off its August highs; this may be evidence the carry trade has returned. 

Christopher Vecchio, CFA, tastylive’s head of futures and forex, has been trading for nearly 20 years. He has consulted with multinational firms on FX hedging and lectured at Duke Law School on FX derivatives. Vecchio searches for high-convexity opportunities at the crossroads of macroeconomics and global politics. He hosts Futures Power Hour Monday-Friday and Let Me Explain on Tuesdays, and co-hosts #Overtime, Monday-Thursday. @cvecchiofx

Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. @fxwestwater

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