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U.S. Stocks May See Further Upside Ahead Of Biden Inauguration

wallstreet july27 20jan21 lt

After ending the previous session mostly higher, stocks are likely to see further upside in early trading on Wednesday. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 86 points.

A positive reaction to the latest earnings news may contribute to initial strength on Wall Street along with continued optimism about more fiscal stimulus.

Shares of Netflix (NFLX) are moving sharply higher in pre-market trading after the video streaming giant reported strong fourth quarter subscriber growth, with total subscribers exceeding 200 million.

Netflix reported fourth quarter earnings that missed estimates, although its revenues came in better than expected and the company said it will explore returning cash to shareholders through ongoing stock buybacks.

Consumer products giant Procter & Gamble (PG) is also likely to see initial strength after reporting better than expected fourth quarter results, as the pandemic increased demand for cleaning products.

Shares of Morgan Stanley (MS) may also move to the upside after the financial giant reported fourth quarter results that exceeded analyst estimates on both the top and bottom lines.

Traders are also likely to keep an eye on developments in Washington as former Vice President Joe Biden is sworn in as the 46th President of the United States.

Biden has called for additional stimulus and an accelerated coronavirus vaccine rollout, which has helped offset concerns about higher taxes and increased regulation under a Democratic administration.

The incoming president is expected to sign several executive orders shortly after taking office, including orders to rejoin the Paris climate agreement and end President Donald Trump's Muslim travel ban as well as the construction of the U.S.-Mexico border well.

Not long after the start of trading, The National Association of Home Builders is due to release its report on homebuilder confidence in the month of January. The housing market index is expected to come in unchanged at 86.

Stocks moved mostly higher during trading on Tuesday as traders returned to their desks following the long holiday weekend. The tech-heavy Nasdaq ended the session just shy of the record closing high set earlier this month.

The major averages all closed in positive territory, with the Nasdaq outperforming its counterparts. While the Nasdaq jumped 198.68 points or 1.5 percent to 13,197.18, the Dow rose 116.26 points or 0.4 percent to 30,930.52 and the S&P 500 climbed 30.66 points or 0.8 percent to 3,798.91.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Wednesday, although Japan's Nikkei 225 Index bucked the uptrend and fell by 0.4 percent. China's Shanghai Composite Index rose by 0.5 percent and Hong Kong's Hang Seng Index jumped by 1.1 percent.

The major European markets have also moved to the upside on the day. While the U.K.'s FTSE 100 Index has inched up by 0.1 percent, the French CAC 40 Index is up by 0.4 percent and the German DAX Index is up by 0.7 percent.

In commodities trading, crude oil futures are rising $0.51 to $53.49 a barrel after climbing $0.62 to $52.98 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $1,839.60, down $0.60 compared to the previous session's close of $1,840.20. On Tuesday, gold advanced $10.30.

On the currency front, the U.S. dollar is trading at 103.80 yen compared to the 103.90 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.2103 compared to yesterday's $1.2129.

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