Dow Jones Increased Overnight, GBP Could Rally If UK Leadership Changed
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Summary:
- Dow Jones futures all increased overnight as investors focused on Netflix (NFLX).
- The near-term outlook for the pound has significantly improved.
Dow Jones Index Rally
The S&P 500, Nasdaq, and Dow Jones futures all increased overnight as investors focused on Netflix (NFLX) subscriber growth and anticipated Tesla earnings. The effort at a stock market rally extended advances on Tuesday, but the session ended well below highs.
Although the market rise is still going strong, nothing yet has been proven. Investors should exercise caution and pay great attention.
In Q3, Netflix's subscriber growth was substantially stronger than anticipated, and the leader in streaming TV is optimistic about Q4 subscribers. Earnings also exceeded expectations. The rise in Netflix's shares suggested a breakout. Overnight, Roku (ROKU) and Disney (DIS) both increased.
In comparison to fair value, Dow Jones futures gained 0.6%, with DIS stock contributing a slight gain. Futures for the S&P 500 rose 0.7%. Futures for the Nasdaq 100 rose 1.4%. United Airlines and NFLX stock both make up the S&P 500 and Nasdaq 100.
DJI Price Chart
GBP could rally in the wake of UK leadership change
The near-term outlook for the pound has significantly improved, according to foreign exchange strategists at BMO Capital, and more gains are possible if the UK leadership is changed in the next two weeks. They claim that such a development is very plausible.
The call follows the dramatic about-face in UK fiscal policy that newly-installed Chancellor Jeremy Hunt revealed. In order to fully restore market confidence in the UK government and finances, Hunt undid all of his predecessor's tax cuts. This was followed by a decline in UK gilt yields and a rise in the value of the pound. The reversal was unavoidable given that the world markets recoiled at the generosity of the new prime minister Liz Truss' economic plans, which called for large tax cuts that would be paid for by borrowing.
